From May through July 2011, Annelise Riles, the Jack G. Clarke Professor of Law in Far East Legal Studies and director of the Clarke Program in East Asian Law and Culture, conducted research on global financial regulation in collaboration with experts at the Bank of Japan, as well as other Japanese researchers and regulators.
The resulting article, "Is New Governance the Ideal Architecture for Global Finance Regulation?," published by the Institute for Monetary and Economic Studies (IMES), Bank of Japan, diagnoses the limitations of the predominant model and argues for a more holistic and systemic legal approach to protect global economies. Riles was invited to lead this research in preparation for the G20 Summit in Cannes, France, this November.
Riles argues that global financial governance has existed in name only. Referencing debates over those institutions deemed "too big to fail," Riles describes what she calls the North Atlantic Post-Lehman Model, "a model generated among regulators in the United States and Europe as they look in their rear view mirror for lessons from the last financial crisis." She addresses concerns raised by Asian regulators about the shortcomings of this approach and examines the perils of the communication breakdown between proponents and skeptics of the model.
In the article, Riles calls for the formation of a transnational team with expertise in private international law, who could offer proposals addressing the needs of the global economic community.
"Building a better global financial regulatory system requires a far more serious exercise in learning across regulatory cultures," writes Riles, "I suggest that if we are serious about preventing, or at least lessening, the very real human effects of the next crisis, we need to begin to combine relevant forms of expertise - law and financial policy, financial law, and international law - in search of better, more flexible, and safer solutions."