Links of the Day

Dani Rodrik starts a debate against global financial regulation:


"Mr Rodrik identifies a number of problems with the idea of global regulation. Would the major economic powers of the world surrender their financial sovereignty to international regulators? No, he says. But if they were willing, could the nations of the world agree on the right set of regulations? They may not, he argues, pointing to the Basel process. Is there even a one-siz-fits-all solution? No, he concludes, citing the fundamental problem with the idea of global regulation."

Check out Richard Baldwin's post for a useful roundup of proposals for reform. I also like this little tidbit from Baldwin as well:

"My friends who are experts in financial regulation tell me that the whole Basle II exercise was subject to ‘regulatory capture’ by the big international banks, so I take Buiter’s point seriously."

Links of the Day

Dani Rodrik posts a reply from the ILO on monitoring global stimulus plans:

"We at the International Labour Organization (ILO) have been keeping track of the stimulus efforts of 40 countries (including the G20) for our annual report and other work. While I agree with most of Gallagher's conclusions, there are factual inaccuracies in their work. Here is my quick response (I also posted comments on your blog):"

and Brian Setser shows why the USD is strengthening despite the ongoing US economic malaise:

"Part of it is that other countries are now in worse shape that the US; what started as a US crisis turned into a global crisis. Part of it is that a fall in the price of oil is good for the US (lower oil import bill) and seemingly good for the dollar. And part of it is that — judging from the TIC data — Americans are selling their foreign investments in “risky” assets faster than foreigners are selling their investments in risky US assets...The huge surge in demand for t-bills from central banks and private investors alike hasn’t hurt either."