There are worries that the growing nationalism and protectionism in some of our trading partners could threaten financial system stability. Some observers argue that this is a recent phenomenon. It is not. Concerns about globalization have been sprouting like bad weeds for more than 20 years. The global financial crisis was an unfortunate reminder that while global banks may be international in life, they are always national in death.
The lecture explains how international standards are set for the global financial system. Experience teaches us that international standards work best for those activities that are truly cross-border in nature. The so-called Basel III Accord is discussed. It is notable for its focus on reforms that address various macro-prudential issues.
The lecture concludes with ideas on some lessons to be learned from recent attempts at international cooperation. International standard setters need to accept there are limits as to how far they can go in setting standards when it comes to products, services and markets that are more domestic in nature. They also need to adapt to the evolving international cooperation cycle and make sure current standards are fully and consistently implemented before seeking out new standards to introduce.
About the speaker
Mark Zelmer is the Former Deputy Superintendent of Financial Institutions OSFI Canada and a Senior Fellow at the CD Howe Institute.
