In our modern societies, market mechanisms shape the modes of production and distribution of goods and services, particularly more and more through the financial sphere, that part of an economy that links savings with investments through different instruments denominated in monetary values'' (Scholte 2003, 189) such as loans, bonds, and options. In the current context of globalization, concept that refers to the growing intensity, extensity and velocity of worldwide interconnectedness (Baylis and Smith 2005), financial activities are fundamental to the development and modernization of countries - witness the increase of average volume of foreign exchanges, from 15 $ billion per day (1971) to 1.450 $ billon per day (1998) (Gilpin as quoted by Scholte 2003, 190). The concept of global governance refers to rule systems that rely on steering mechanisms through which authority is exercised in order to preserve the coherence of the systems and move towards desired goals (Rosenau 2003, 72). This worldwide process of decision-making is thus a means to overcome global problems such as, in the case of finance, a lack of efficiency, a lack of stability, and a problem of compatibility with social and environmental expectations.
[...] Within the three dimensional space of governance arrangements (Koenig-Archibagi 2003, these values could be translated by more publicness, more delegation of power and more inclusiveness, giving therefore more sense to a democratic global governance of finance. However, this view turns a blind eye on the competing nature of capitalism, particularly in the financial sector. In fact, the structure of cooperation remains basically related to the convergence of common interests rather than the one of common values. When political divergences are strong, collective choices are difficult to achieve. [...]
[...] Confronted with the rise of transnational financial actors and networks, the state encounters more pressure in global decision-making processes: the growing role of NGO's and the lobbing of transnational firms (Ngaire Woods 2003, 27) as well as the autonomy of international institutions challenge in a way the state sovereignty. But Koenig-Archibagi (2003, 47) states that the decrease of state capabilities, caused by the external effects of globalization such as the capital volatility, are more resulting in demands of governance along the state than against it. [...]
[...] This paper is developed in three sections, each of them being divided in two subsections: the first section deals with state making and interstate competition in relation to the market pressures of capitalism, particularly the influence of the US in the shaping of the post-war order; the second section studies the current relations of power and authority within the different modes of financial global governance and their consequences in terms of economic decision-making processes; lastly, the third section explores the measures and the challenges of what could be a balanced global financial governance, while underlying the prospects and limitations of Cosmopolitanism. [...]
[...] The idea of balanced global governance of finance is still a long way off, on the one hand because the established commercial and financial actors remains reluctant to such a change, and on the other hand, because the concerns of Cosmopolitanism don't focus enough on the competing nature of economy. However, the emergence of multidirectional modes of governance is an important step in terms of convergence of interest, which is, undoubtedly, one of the key factors to be reckoned with in the financial sector. [...]
[...] If the efficiency of governance lies in its capacity to generate compliance (Rosenau 2003 72-75) and its capacity to cope with abuses and disasters, the failure of finance governance is a state of fact that sheds light on the question of finance regulation. Many policies could be implemented: the control, restriction and taxation of capital movements, the surveillance of data, the creation of mechanisms for complaint and compensation. The investigation of offshore centres would also be central to these policies. [...]
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