International Monetary Law: Issues for the New Millenium. Edited by Mario Giovanoli. [Oxford: Oxford University Press. 2000. li, 515 and (Index) 22 pp. Hardback. £125 net. ISBN 0–19–829923–0.

Abstract

The financial crises that spread through East Asia, Russia and Latin America in the late 1990s have led to renewed calls for reform of the “international financial architecture” that would involve legal and institutional changes for the regulation of international financial markets. Since the end of the Bretton Woods system in the early 1970s, there have been over 100 financial crises while 132 of the 184 members of the International Monetary Fund have suffered varying degrees of banking fragility and distress. Although the term “banking crisis” and “financial crisis” are often used interchangeably, the IMF defines a financial crisis as a currency crisis, which is a speculative attack on the currency either causing a devaluation or forcing the authorities to spend large amounts of foreign exchange reserves to purchase its currency or to raise interest rates sharply. A banking crisis refers to actual or potential bank runs or failures, which induce banks to suspend the internal convertibility of their liabilities or to compel the government to intervene. Financial and banking crises often have systemic consequences, impairing markets’ ability to function effectively and may have major adverse effects on the economy. Many experts agree that adequate regulation at the domestic and international levels has not accompanied the progressive liberalisation of financial markets and, in particular, of short-term capital flows. It is a serious defect with the current system that the development of international monetary and financial law—at least in the areas of regulation and supervision—has only occurred haphazardly and principally as a result of a series of financial crises that began in the mid 1970s. Indeed, this book is a welcomed contribution to understanding many of the complex issues that arise in international monetary and financial law.