The Contemporary Surveillance Regime

What is lecture actually on?

• Myriad of Institutions that set and monitor the adherence to global norms of ‘good governance

• The importance of system of norm setting and monitoring lies in its totality

• The critical importance of individual aspects of the regime can be contested.

• Subjective judgements about what institutions to include. You could include thousands

• This lecture will look at six sets of institutions (IMF, OECD, Credit Ratings Agencies, BIS, IOSCO, IASB)

• Some are public and some private

• The unifying feature is focus on information• Implicit and ideational power as opposed to

overt coercive power. Contrast to World Bank and WTO

• In many areas of social life norms are more important than rules in regulating behaviour.

Structure of the Lecture

• Section One: IMF and OECD

• Section Two: Credit Rates Agencies

• Section Three: Bank of International Settlements (BIS)

• Section Four: IOSCO and IASB

• Section Six: Conclusion

IMF

• Established by 1944 Bretton Woods Conference came into being in 1945

• Manage exchange rate system and assist countries with liquidity problems

• Crisis of purpose in the 1970s• Activities come to be confined to Third

World and its role merged with World Bank

• Marginalised by Bank in long-term restructuring in 1990s

• Management of recent crisis has been heavily criticized, fairly or unfairly (Asian 1997, and most significantly Argentina in 2001. Successful default against IMF advice)

• Future role unclear after 2001 and for a lot of analysts institution is finished.

• I disagree. Since 2001 IMF transform itself from crisis manager to an agent of transparency (fits New Financial Architecture).

• Sets informational standards SPASS• Also IMF: Selected Issues• The IMF defines standards and

monitors adherence to them

• A lot academic analyse (Mosley) is sceptical about the importance of the SPASS and the ability of the IMF to redefine itself

• This reflects weaknesses in their analyse.

• Focus almost exclusively on global market and ignore internal politics

• Club of advanced capitalist economies and leading emerging markets (30 countries- democracy and market economy, established in 1961)

• Paris based collective of economists ()

• Seeks legitimacy through technical competence and formal apolitical status

• Produces (v readable) reviews of policies of each member economy every 1-2 years and specialist issues papers

• Strong neo-liberal institutional mindset since late 1970s

• Members countries use the institution to legitimate particular policies

• See particularly employment, regulatory reform and corporate governance

• Particular political decisions to adopt certain policy are transformed into technical decisions

• OECD has been particularly important in defining the agenda in 3 key areas

• Labour Markets (OECD Job Study), Regulatory Reform, Corporate Governance

• OECD succeeded in defining Neo-Liberal Regulatory Systems and frameworks of Corporate Governance as good systems of governance and regulation.

• Particularly important in crisis.

• Particular political decisions to adopt certain policy are transformed into technical decisions

• OECDs is an agent of Depoliticisation• Monitoring becomes a way of locking in

reforms and empowering certain state elites • It is not impossible to ignore the OECD but

you have to explicitly justify why.

Section Two

• Credit Rating Agencies• Private Institutions. Main ones are American

(Moody’s and S&P) 3rd French • Rate $30 trillion debt in 2005• Empowered by public regulation • Ability to affect capacity of (most) core

capitalist states to raise finance is not necessarily critical. Japan, but…………..

• Material significance is much greater in relation to local government, firms and non core capitalist states

• Judgements about policy stance, economic prospects as current financial position

• Negative impact on certain low income American cities (Philadelphia)

• Credit Rating Agencies promote municipal neo-liberalism

• Neo-Liberal reform outside the core

• Particular patterns of corporate organisation are rewarded and some punished.

• Credit Rating’s Agencies agents of neo-liberalism

• This is not conspiracy theory. I not assuming its conscious

Section Three

• Old informal conservative club of central bankers

• Based in Switzerland

• Secretere play a key monitoring role

• Important institution within the institution is Balse Committee on Central Bank regulation (10 members)

• Define appropriate standards for international active central banks

• Principles translated into national regulatory regime

• Market makes adherence to principle mandatory for all international active institutions. Principles power goes beyond its agenda setters

• Ability to define sound practice is source of material power.

• Basel II: Basel II: International Convergence of Capital Measurement and Capital Standards: a Revised Framework (http://www.bis.org/publ/bcbs107.pdf).

• Shift towards risk based regulation (following UK lead )

Section Four

• IOSCO(International Organisation of Securities Commission) Grew out of 1974 Inter American Institution. US SEC is understood as dominating

• Transparency and information sharing

• Capital Standards for Market Operators

• Finally, international accounting standards. International Accounting Standards Board (IASB). Effectively private institution

• Effectively promote and legitimate US system as sound. Wants global convergence around this system. Their standards create important point of reference for reforming elites (particularly in wake of crisis. Interacts with other institutions)

• Both these institutions present political as purely technical

Conclusions

• The importance of regime is easy to underestimated

• Unevenly and in many cases badly studied

• Its significance is partly disguised by reliance on norms and unofficial power

• In sense its partially invisibility is its strength. Many of the norms promoted simply come to represent common sense. For example, data transparency. Frame limits of our thinking.

• Regime is successful in defining parameters of reform and range of permissible solutions to problems. Provide important political support to key groups.