New Financial Architectures and Legal Infrastructures: Toward a Corrected and Compensated International Monetary System

The international monetary system features a powerful subsystem of nations with an organized polyarchic economy—in other words, a market economy adjusted and balanced by government authorities to protect the market against forces operating within it but failing to abide by the rules (as in the defense of fair competition), in which excessive asymmetry runs the risk of toppling the system. The central bank is the body guaranteeing both stability and the system. However, globalization prevents the central banks from controlling the massive flows of derivatives. In the absence of a supranational authority, the only remedy realistically feasible today lies in the network of informal agreements among the leading economic powers—the G-7, G-8, and G-20 countries. These countries, on the one hand, intervene on a case-by-case (or crisis-by-crisis) basis and, on the other, strive to bring chaotic corrective and compensatory measures into a market dominated by “turbocapitalism” to ward off future crises. Their actions thus strengthen legal infrastructures and the information flows that ensure transparency and involve financially sound nations, weak nations, international organizations, assorted classes of operators, and major private institutions.