Key Principles for Financial Reforms that G-20 Leaders Should Implement
Working Paper #183
The financial crisis that began in the United States in the summer of 2007, and then spread to Europe, has now become global and increasingly serious. Although governments and central banks around the world have taken many costly measures, they have not yet been able to contain the crisis. The threat of global recession and the dire social consequences that could accompany such a downturn make internationally coordinated, but nationally different, expansion of fiscal spending to help maintain economic activity essential. It also calls for an urgent reform of the global financial architecture and regulatory system.
The authors argue that no fundamental–or global–reforms can be enacted if they do not arise from a process that is inclusive of both industrial and developing countries, and in which both large and small countries have a meaningful voice. In short, representative global institutions–not ad hoc groupings–must be at the center of reform efforts. Why? Any global solutions, whether short-term measures to stabilize the current situation or long-term measures that attempt to prevent future financial meltdowns, must be designed to protect not only the G7 or G20 economies but also emerging markets and, especially, the poor populations of developing nations. Otherwise, global economic stability cannot be restored, and both economic growth and poverty reduction efforts will be derailed.
About the Authors
Senior Policy Analyst
Friedrich-Ebert-Stiftung New York
Sara Burke is a senior expert on the global economy and international financial institutions at the German think tank, Friedrich-Ebert-Stiftung. Based in the New York office since 2008, she provides policy analysis and advice on economic policy frameworks and the multilateral system, as well as on their social and political impacts. Prior to that, in 2003 she founded and co-edited Gloves Off, a webzine with an economic lens, linking current and historical events. She has published a number of papers on economic and social rights. She has an MA from Stanford University and a BA from Reed College.
José Antonio Ocampo
Professor of Professional Practice at Columbia University and former Minister of Finance of Colombia
Jose Antonio Ocampo is a Professor of Professional Practice in the School of International and Public Affairs and former Minister of Finance of Colombia. He is also a Fellow of the Committee on Global Thought at Columbia University. Prior to his appointment at Columbia, Professor Ocampo served as the United Nations Under-Secretary-General for Economic and Social Affairs, and head of UN Department of Economic and Social Affairs (DESA), as Executive Secretary of the UN Economic Commission for Latin America and the Caribbean (ECLAC), and has held a number of high-level posts in the Government of Colombia, including Minister of Finance and Public Credit, Director of the National Planning Department, and Minister of Agriculture . Professor Ocampo is author or editor of over 30 books and has published over 200 scholarly articles on macroeconomic theory and policy, international financial issues, economic development, international trade, and Colombian and Latin American economic history.
Financial Markets Program Director
Initiative for Policy Dialogue (IPD)
Stephany Griffith-Jones is an economist specialising in international finance and development, with emphasis on reform of the international and national financial system, especially in relation to financial regulation and global governance. She is Financial Markets Director at the Initiative for Policy Dialogue, Columbia University. Previously she was Professorial Fellow at the Institute of Development Studies at Sussex University. She was Director of International Finance at the Commonwealth Secretariat and worked at UN DESA and ECLAC. She was senior consultant to governments in Eastern Europe, Latin America and Africa and many international agencies, including the World Bank, the IADB, the European Commission, UNDP and UNCTAD. She was a member of the Warwick Commission on financial regulation. She currently is theme leader on finance in the ESRC /DFID growth programme for LICs, especially African ones. She has published over 20 books and many scholarly and journalistic articles. Her books include Time for the Visible Hand, Lessons from the 2008 crisis, edited jointly with José Antonio Ocampo and Joseph Stiglitz.