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Financial crisis and global governance : a network analysis (English)

This paper attempts to use network theory, drawn from recent work in sociology, engineering, and biological systems, to suggest that the current crisis should be viewed as a network crisis. The author surveys the concepts of networks, their defining characteristics, applications to financial markets, and the need for supervision and implications for national and global governance. Then, author briefly examines the current financial crisis in the light of the network analysis and surveys the recent reforms in financial regulation and architecture. The paper concludes with an analysis of the policy implications of network analysis.

Details

  • Author

    Sheng, Andrew

  • Document Date

    2010/01/01

  • Document Type

    Working Paper (Numbered Series)

  • Report Number

    57766

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2010/12/31

  • Disclosure Status

    Disclosed

  • Doc Name

    Financial crisis and global governance : a network analysis

  • Keywords

    financial market;International Organization of Securities Commissions;market participant;information and communication technology;new york stock exchange;mark to market accounting;prudential regulation and supervision;Food and Drug Administration;moral hazard;financial regulator;systemic risk;economies of scale;financial system;financial regulation;financial crisis;global financial market;loose monetary policy;gains and losses;assessment of risk;credit default swap;private sector participant;excessive risk taking;financial derivative;enforcement of regulation;loan provisioning requirement;global financial institution;access to information;positive feedback mechanism;long term risk;financial sector governance;global financial architecture;offshore financial center;implicit deposit insurance;types of network;formal organizational structure;global equity market;securitization of asset;systemic financial stability;number of connections;fair value accounting;early warning mechanisms;global financial system;moral hazard behavior;obstacles to growth;Asset backed securities;costs of regulation;european central bank;hedge fund risk;exchange of information;Foreign Exchange Reserve;cost of failure;global financial stability;fixed exchange rate;discounted present value;stock market capitalization;future financial crisis;dynamics of growth;centrally planned economy;global financial crisis;growth and development;asian financial crisis;implications for policy;country case study;state of knowledge;financial engineering;transaction cost;property right;financial service;information asymmetry;social cost;global trade;financial activities;financial innovation;banking system;global imbalance;common standards;power law;common purpose;cross border;financial policies;regulatory system;regulatory competition;capital flow;negative feedback;biological system;personal responsibility;local network;decision tree;insurance companies;general agreement;mortgage market;fire sale;financial instrument;independent body;thematic papers;exchange information;Macro Prudential;global governance;negative externality;dot com;asian crisis;efficient market;global market;global network;

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Citation

Sheng, Andrew

Financial crisis and global governance : a network analysis (English). Commission on growth and development working paper ; no. 67 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/143071468174883223/Financial-crisis-and-global-governance-a-network-analysis