Following the financial crisis, much has been done for preventing systemic failure in the financial sector, stalling economic downturn and ensuring a recovery. However, the adequacy and appropriateness of the measures adopted remain questionable. As far as reforming the financial sector is concerned, despite a spate of proposals, agreement on the appropriate mix of policies and the progress with implementation have been limited. This section presents papers and articles that analyse the adequacy of various proposals and measures, the challenges that could arise at the time of implementation and advocate additional or alternative measures. Some of these papers also take a renewed look at the veracity of the arguments given for explaining the genesis of the crisis.
  
The Global Crisis and the Governance of Power in Finance
Gary A. Dymski (May 18, 2010)
   
This paper argues that resolving the global crisis of financial systems depends on recognizing and responding to the considerable, multi-dimensional power accumulated by the very financial firms whose dysfunctionality helped create that crisis in the first place. The existing rhetoric of financial regulation which focuses attention on problems of mechanism design, fails to take into account the presence and implications of systemic power in the system. But unless the debate over financial regulation is broadened, decades of sub-par growth and excessive financial exploitation lie ahead.

Financial Sector Regulation in Developing Countries: Reckoning after the crisis
Anis Chowdhury (February 24, 2010)
   
The global financial and economic crisis has cast serious doubts about the paradigm of market deregulation that dominated the last three decades. Although many developing countries, especially in Asia, became cautious following the Asian financial crisis, international financial institutions continued to advise developing countries to deregulate, albeit at a slower pace. However, this paper argues for re-regulating the financial sector with a view to preventing system-wide failures and fulfilling development needs. It highlights the importance of segregating different parts of the financial sector as well as controls over both deposit and lending rates, and the role of government-owned banks, especially for agriculture and SMEs.

The WTO as Barrier to Financial Regulation
Jayati Ghosh (February 8, 2010)
   
Many of the financial regulatory proposals now being considered by developed countries might not be feasible given the legally binding commitments these countries have made under GATS with respect to financial services liberalisation. Such WTO rules may therefore get ignored or GATS may require to be renegotiated, for the necessary financial sector reforms to take place.

The Perils of Paradigm Maintenance in the Face of the Crisis
Andrew Fischer (February 3, 2010)
   
This paper addresses how Keynesian narratives are being used to reconstitute an orthodox policy paradigm in the face of the current economic crisis. These processes of paradigm maintenance need to be urgently addressed if the current crisis is to be leveraged for a return to a more progressive, inclusive and developmental policy paradigm in both the North and the South. Failing this, current orthodoxies risk being reconstituted or even reinforced, and we could find ourselves soon entering a new round of development debacles similar to those of early 1980s.

No Going Back: Why We Cannot Restore Glass-Steagall's Segregation Of Banking And Finance
Jan Kregel (January 21, 2010)
   
Recently, a number of authoritative voices have called for a return to the New Deal Glass-Steagall legislation as the most appropriate response to the clear failure of the 1999 Financial Modernization Act to provide stability of the financial system. However, a clear understanding of the 1933 Banking Act, and subsequent regulatory interpretation and legislation suggest that this would be difficult, if not impossible. A new Glass-Steagall Act would have to be substantially different from the original, and some of the internal structural contradictions that led to its demise remedied.

Controlling Dangerous Financial Products through a Financial Precautionary Principle
Gerald Epstein and James Crotty (January 22, 2010)
   
High risk, opaque, and complex financial products have been among the key causes of the current economic crisis. Not only have these products helped cause the crisis but they have also made it extremely difficult to resolve. In response, a number of analysts have proposed a requirement that financial products be approved by a government regulatory authority before they can be marketed. In this paper the authors outline how a financial products regulatory authority would work.

The Theory of the Global ''Savings Glut''
Prabhat Patnaik (January 22, 2010)
   
For some time now, Mr. Ben Bernanke, Chairman of the Federal Reserve Board, has been arguing that the substantial increase in the U.S. current account deficit, the swing from moderate deficits to large surpluses in ''emerging-market countries'', and the significant decline in long-term real interest rates, since 1996, are the fall-out of a world ''savings glut''. Some, especially authors from the IMF stable, have gone further to explicitly link this ''savings glut'' to the world financial crisis. The present paper is devoted to a close examination of this ''savings glut'' theory.

Financial Innovation and System Design
Mario Tonveronachi (January 22, 2010)
   
The most relevant financial innovations have been the result of active policies pursued by public authorities, which have intrinsic to them, a specific financial design based on the freedom to create and absorb financial risks. The excesses that are considered as the main culprits of the current crisis are therefore a part of the physiology and not of the pathology of the wanted financial morphology. As a consequence, no regulatory reform can be effective without radical changes in the system design. A general outline of an alternative approach to regulation is presented.

Financial Regulation and the Lobbying Activities of the Financial Sector
Carlo Panico and Antonio Pinto (January 22, 2010)
   
The breakdown of the Bretton Woods' agreements and the oil shocks of the Seventies, the paper argues, changed the management of financial firms. Flexible exchange rates created new opportunities for financial operations while inflation and the decision of the authorities to attribute high priority to it accelerated financial innovation. These phenomena led to a progressive growth of the turnover of the financial sector, which strengthened its weight in the economy and may have favoured the introduction of legislation reducing the ability of the authorities to prevent the rise of systemic risk.

Financial and Economic Crisis in Eastern Europe
Rainer Kattel (January 22, 2010)
   
The paper argues that the foreign savings-led strategy followed by Eastern European economies created in 2000s almost a decade long carry trade of easy credit. That, among other things, transformed the domestic financial sector into largely foreign-owned universal banks with weak linkages with the domestic productive sector. While the credit and consumption boom helped gloss over deeper structural problems then, now these economies need to step up their efforts in industrial and innovation policies for paving their way out of the crisis.

Productive Incoherence in an Uncertain World: Financial Governance, Policy Space and Development after the Global Crisis
Ilene Grabel (January 20, 2010)
   
The current global financial crisis raises important questions for scholars of international political economy. Among the most important of these is how it is influencing various dimensions of financial governance vis-à-vis developing and transitional economies. The paper examines three related questions. How is the crisis affecting the governance and policies of the IMF; the prospects of regional alternatives to the Fund; and the policy space available to developing and transitional countries?

Global Liquidity and Financial Flows to Developing Countries: New Trends in Emerging Markets and their Implications
C.P. Chandrasekhar (January 22, 2010)
   
This paper argues that supply-side factors rather than the financing requirements of developing countries, explain the recent revival and surge in capital flows into developing countries. Financial liberalization and the globalization of finance have also resulted in changes in the financial structure. This in turn has implications for the accumulation of risk in markets where agents tend to herd. Associated with this increasing risk are changes in the business practices and motivations of financial firms that reduce the role of finance in ensuring broad-based economic growth.

Restructuring the Financial System: A Synthetic Presentation of an Alternative Approach to Financial Regulation
Mario Tonveronachi and Elisabetta Montanaro (January 22, 2010)
   
Rejecting the current approach to financial regulation based on a laissez faire regime on risk production and allocation, the authors advocate that regulation must contain and monitor systemic risks through a top-down approach, while the resulting morphology must be consistent with market discipline imposing bankruptcies. Apart from rules for risk containment with a sharp distinction between leveraged financial institutions, non-leveraged financial institutions and non-financial firms, the proposed new framework also covers rules for derivatives, markets, transparency, crisis resolution, multinational financial institutions as well as supervisors' powers and accountability.

New Pathways to Oligarchy: Towards a Theory of Oligarchic Democracy
Amiya Kumar Bagchi (January 22, 2010)
   
In this paper the author argues that as recorded history has shown, any republican government could end up as an oligarchy. In addition to giving a detailed exposition of the various strands in the analysis of oligarchy, the author contends that the Indian experience will add new chapters to the emerging corpus of work on oligarchic democracy.

Some Observations on How to Deal with the Problem of ''Too big to fail/save/resolve''
Jan Kregel (January 4, 2010)
   
The current approach to the financial crisis, of resolving small and medium size banks through the FDIC while giving direct and indirect government support to the banks that are considered too large to be wound up, has created an even smaller number of even larger banks. However, there are at least three separate problems associated with bank size that suggest that this approach may not reduce the systemic risks of large financial institutions that contributed to the current crisis.

January 21, 2010.