The Paradigm Shift in Global Financial Regulation

As evidenced in recent financial crisis episodes, the worlds financial regulatory authorities have not succeeded in keeping pace with the dynamics of evolving international financial system. The economic disruption has raised a question of global governance as an agenda for rethinking the rules and norms that underpin the world order, because the current global governance agenda emphasizes the universalization of understanding of global governance based on the efficiency and effectiveness through one-size-fits-all formulas. That is, the continued failure of national regulatory authorities to collaborate effectively attenuates prospects for the successful restructuring of the global financial regime through international cooperation based on harmonization. In this regard, this paper stresses the importance of the private sector in the governance of financial system at national, regional, and international levels. Further, it addresses what the proper balance should be between the public authority and private interests for the appropriate public-private partnership. Given the difficulties of institutional collaboration at the international level, this paper emphasizes the importance of regional cooperation for global financial governance. It attempts to answer the question of what should be the appropriate national, regional, and international responses to global financial integration, and thus provide a new paradigm in global financial regulation.