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Between power and purpose: central bankers and the politics of regulatory convergence

Published online by Cambridge University Press:  22 May 2009

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In the early 1980s, when the debt crisis threatened to disrupt the pattern of trade and investment flows that had evolved since the end of World War II, central bankers faced the challenge of maintaining public confidence in the commercial banks that were at the heart of the international payments system. Although the central bankers agreed that a run on one international bank could lead to a global catastrophe requiring massive government intervention, they did not initially agree on a policy project to strengthen the international payments system. In analyzing central bank cooperation and the processes leading to the adoption of a single international capital adequacy standard, this article argues that agreement on a uniform standard was due to a combination of political power and shared purpose on the part of the United States and Britain. While the article does not argue that the central bankers were an epistemic community as defined in this issue, it further explores the conditions under which epistemic communities are likely to arise.

Type
Research Article
Copyright
Copyright © The IO Foundation 1992

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References

I thank Benjamin Cohen, Peter Cowhey, John Goodman, Peter Haas, Peter Katzenstein, Stephen Krasner, John Odell, Louis Pauley, M. J. Peterson, James Sebenius, and Glenn Tobin for their comments on earlier drafts of this article. I am also grateful to the many commercial bankers, central hankers, and bank supervisors who graciously granted my request for confidential interviews.

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