Looking for Solutions to the Financial Crisis

Conference proceedings “The Financial Crisis, the US Economy, and International Security in the New Administration”, New York, november 2008.

The global financial crisis that has been unfolding before our eyes since Summer 2007 marks a turning point in the recent history of globalization. The wave of deregulations and the unprecedented expansion of the financial sector that took off in the early 1980s seems to have come to an end and the consequences are everywhere to see. Scholars, regulators and politicians across the world search for solutions,wondering how the system should be reformed. This debate has just begun but it seems clear that the difficulties will not be overcome by spontaneous market adjustments or minor regulatory interventions. What we need is a new financial architecture, built upon new policies and new regulations.

The International Initiative for Rethinking the Economy is part of this reflection. Since June 2008, we have hosted an international seminar on this issue, gathering together a group of prominent finance and financial regulation experts, both scholars and practitioners. The members of this group come mostly from North-America but other parts of the world, like Europe, China and Brazil, are also represented. This is not a coincidence. We believe that the United States still has a key role to play in the search for a new financial architecture. Nevertheless, the problems we are facing are global. Our efforts should be global as well.

Our hope is to move gradually from diagnosis to policy proposals. One step in that direction was taken in November last year, when we organized an international conference in New York at the Bernard Schwartz Center for Economic Policy Analysis together with The Economists for Peace and Security, The Levy Economics Institute and the Charles Leopold Mayer Foundation.