Governments, banks and global capital : the emergence of the global capital market and the politics of its regulation
This thesis analyses the global capital market, as one of the most dynamic aspects of the world economy. Once the dollars have begun to circulate outside the US, the expansion of transnational banking could not be curtailed. In addition to Eurocurrencies, other external financial markets were created, providing a global structure for the whole range of instruments to be traded. Economic and political changes in the late 1970s and in the beginning of the 1980s contributed to a shift in financial logic of both intermediaries and investors: from credit markets, they have increasingly turned to securities. Computer banking networks spanned the globe and provided almost an instantaneousa ccesst o every corner of the world of finance. So, in the mid-1980s, a truly global capital market came into being. Global financial structure sent critical signals on several occasions, regarding its over-all stability and soundness. Regulation of such global structure has attracted immense attention world-wide, as cross-border capital flows epitomize basic dilemmae about the concept of market economy: to what extent efficiency-gains justify loose market regulation, or, to put it the other way, to what degree the regulation could be tightened (i. e. market stability over-emphasized) to avoid hampering efficiency. These questions have indeed become political choices, provoking hot debates on both the national and the international level. The International Relations' approach to the global environment has proved to be a necessary enlargement of classical economic analysis today. In this particular case, the Issue-Based paradigm and regime theory were the most appropriate analytical frameworks to be applied. The hyper-issue of an orderly market economy v. a socialist command economy links the issues like international control, capital rules, liberalization and market integrity. A wider policy-system for global capital flows has emerged, featuring many and diverse actors. Although priorities vary to a great extent, it can be concluded that the multi-centric structure emphasizes the values of efficiency and freedom, while the intergovernmental world still highlights the maintenance of order and stability. Although regime theory has provided a valuable framework for this analysis, it still fails to reflect changing reality of modern financial structures. Instead of concentrating exclusively on governmental actors and the intergovernmental world, regime theory should also be applied on processes which are going on in the other, multicentric world. For the time being, an intergovernmental regime for global capital market is beyond the reach. Contrary to that, a transnational, nongovernmental regime for capital flows has begun to emerge.