Global money rules: The political economy of international regulatory cooperation

From 1970-1990, international efforts to regulate financial activity grew dramatically. New "institutions" and new agreements developed in an interrelated fashion. But these cooperative arrangements were unusual by most standards: the institutions had no formal charters and the agreements had no formal standing. Instead, they were informal arrangements designed to solve practical problems.; This thesis examines the international "regulation" of banking institutions and of securities markets during the two decades that ended in 1990. It examines the following questions: What cooperation occurred? Why did it develop in that fashion? What general lessons can be learned regarding the more general process of regulatory cooperation?; The thesis examines five cooperative efforts: (1) The Basle Concordat (1975-1990), (2) An attempt to create common reserve requirements in the Euromarkets (1978-1980), (3) The Basle capital adequacy agreement (1986-1990), (4) Memoranda of Understanding on the enforcement of securities laws (1982-1990), and (5) An agreement on the capital of securities firms (1988-1990). The first three of these cases were conducted under the auspices of the "Basle Committee on Banking Supervision" in the Bank for International Settlements; the last two were conducted, in part, under the auspices of the International Organization of Securities Commissions (IOSCO).; Four factors contributed to the outcomes in international financial regulation: the nature of the international problems, the power and interests of relevant states, the tactical process of coalition formation, and the domestic division of responsibility between political and regulatory institutions.; The thesis focuses on the last of these four explanations, proposing hypotheses that fall within the growing "two-level games" literature. Specifically, the thesis proposes that negotiators of international agreements are affected by their position in the domestic institutional hierarchy. When regulators negotiate, the prospects for international cooperation are distinctly affected. Regulators have abilities to cooperate given their domestic delegation of authority, but the limits to that authority have strongly influenced international cooperation.; The practical implications of the study address the political oversight of the regulatory process, the independence of central banks, and the costs and benefits of an international process of regulatory convergence.