Enforcing International Financial Regulatory Reforms

摘要

International finance law keeps the tradition of 'soft law' standards even after the 2008 financial crisis. This status quo derives from concerns over sovereignty and regulatory uncertainty. Although soft law has merits in pragmatic rule making and flexible rule implementation, soft law is not an efficient design for international financial regulation. The soft-law tradition led to difficulties in implementing G20-led international financial regulatory reforms against the 2008 financial crisis. Inconsistent implementation and potential regulatory arbitrage across borders have swamped all sectors of international financial regulatory reforms. The implementation problem tends to induce states to race to the bottom, making international financial regulatory reforms in vain, and even laying the ground for the next financial crisis. This article calls for keeping the right momentum of hardening international finance law along possible dimensions of obligation, stringency, delegation, and enforcement. This article proposes that a stronger institution of the Financial Stability Board will help facilitate the reforms, and a credible dispute settlement mechanism is a necessary design for enforcement.