But the “prospect for effective cooperation is not encouraging,” says the paper, adding the G20’s size “may be a problem.” That’s because the more countries there are trying to coordinate their policies, and the more varied their financial structures, the less likely they are to get agreement, reducing the chances of successfully harmonizing regulations governing the group’s financial institutions.
Based on that, “we should not expect too much of the Toronto summit,” of the G20, scheduled for June 26 and 27, says Paul Masson, the study’s co-author. Prof. Masson is a research fellow and adjunct professor at the Rotman School, and is a former adviser to the Bank of Canada as well as to the International Monetary Fund.
“Many regulatory issues are complex and need to be adapted to individual countries’ systems.” Prof. Masson says. “Harmonization may not be the best solution in all cases given the structural differences.”
Using two different mathematical models, Prof. Masson and co-author John C. Pattison show that coordination is a logical choice to deal with growing uncertainty as well as when countries are trying to balance their interests in maintaining economic stability while keeping their banks competitive. When the economy is uncertain, coordination allows policy-makers to make choices minimizing potential spillover effects from one country to another. It also works when countries are trying to balance their interests during a crisis, because countries put more value on financial stability due to suffering a common shock.
However, without an enforcement mechanism, cooperation “may break down,” the authors point out, and once the current crisis is over, “governments may well no longer possess the political will to finish the job.”
The G20 was created in 1999 and represents established and emerging market economies. It has replaced the G7 and G8 as the main forum for international economic cooperation in response to the toxic spillover effects of the 2008 financial meltdown.
The complete study is available at: http://www.rotman.utoronto.ca/newthinking/G20reforms.pdf .
For the latest thinking on business, management and economics from the Rotman School of Management, visit http://www.rotman.utoronto.ca/NewThinking .
The Rotman School of Management at the University of Toronto is redesigning business education for the 21st century with a curriculum based on Integrative Thinking. Located in the world’s most diverse city, the Rotman School fosters a new way to think that enables the design of creative business solutions. The School is currently raising $200 million to ensure Canada has the world-class business school it deserves. For more information, visit http://www.rotman.utoronto.ca.Ken McGuffin
Ken McGuffin | EurekAlert!
Smart Data Transformation – Surfing the Big Wave
02.12.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT
Climate change could outpace EPA Lake Champlain protections
18.11.2016 | University of Vermont
In recent years, lasers with ultrashort pulses (USP) down to the femtosecond range have become established on an industrial scale. They could advance some applications with the much-lauded “cold ablation” – if that meant they would then achieve more throughput. A new generation of process engineering that will address this issue in particular will be discussed at the “4th UKP Workshop – Ultrafast Laser Technology” in April 2017.
Even back in the 1990s, scientists were comparing materials processing with nanosecond, picosecond and femtosesecond pulses. The result was surprising:...
Have you ever wondered how you see the world? Vision is about photons of light, which are packets of energy, interacting with the atoms or molecules in what...
A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.
Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...
In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.
“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...
The Max Planck Institute for Physics (MPP) is opening up a new research field. A workshop from November 21 - 22, 2016 will mark the start of activities for an innovative axion experiment. Axions are still only purely hypothetical particles. Their detection could solve two fundamental problems in particle physics: What dark matter consists of and why it has not yet been possible to directly observe a CP violation for the strong interaction.
The “MADMAX” project is the MPP’s commitment to axion research. Axions are so far only a theoretical prediction and are difficult to detect: on the one hand,...
16.11.2016 | Event News
01.11.2016 | Event News
14.10.2016 | Event News
07.12.2016 | Health and Medicine
07.12.2016 | Life Sciences
07.12.2016 | Health and Medicine