Systemic Risk and New International Financial Architecture: Reconciling KEYNES and Neo-Liberalism?
Facing the systemic crisis which originated in Mexico and in Asia, and spread to all financial centers, the objective of the new international financial architecture is to master the international financial instability; this means improving the transparency and the regulation of markets, as well as arousing a greater responsibility of public and private actors in the prevention and management of crises. But many interrogations subsist concerning the contours of the new architecture. Does it simply mean improving the transparency of information in order to prompt better practices? Or is it desirable to introduce new constraining rules as far as the international mobility of capital is concerned? Does it call for allocating new responsibilities, and therefore new resources, to the International Monetary Fund, or should the Bank for International Settlements, or a central banks club, be entrusted with such a mission? In fact, these questions arise mainly because there is no theoretical consensus among economists and official experts. Paradoxically this leads us to revisit the thought and theoretical inheritance of KEYNES. The growing importance, in current debates, of concepts such as confidence, liquidity, imperfection of financial markets, mimetic contagions, is striking in that respect. Furthermore, discussions about the international financial institutions remind debates that KEYNES started, in his Treatise on Money as well as during the preparation of the conference of Bretton Woods. In a nutshell, cannot one see in this new international financial architecture the revenge of KEYNES? In section 1, one replaces the project of international financial architecture in the context of systemic crisis of the 90’s. The basic principles of this architecture, as they appear in reports of the G 22 and the G7, are then reminded, in section 2. In section 3, one sheds a light on the keynesian foundations on which, according to us, this project partially rests, and draws some consequences on the responsibilities assigned to the International Financial Institutions.