Reform of the global financial architecture: a new social contract between society and finance.

Abstract

The current global crisis poses significant challenges for our fi nancial system, our economies, and our societies. Overcoming these will require a new “social contract” between society and finance. This must include improvements to corporate governance, a reform of capital requirements, a more transparent and less procyclical accounting framework, banking laws to reflect modern financial markets, better infrastructure, and stronger supervision. Given the global nature of today’s capital markets, it will also require efforts to be coordinated, if not harmonised, internationally in order to avoid any re-fragmentation and re-nationalisation of the financial system. Addressing these challenges is essential to creating a financial framework that can support prosperous growth in the coming decades.