Scared of more regulation at home? Those fears might prove moot if global discussions give international economic regulators teeth.
From the Wall Street Journal:
A planned international summit on the financial crisis is turning into a debate over the future shape of capitalism, with European leaders favoring greater international oversight of markets, and U.S. officials preferring the current model of national regulation.
Bush aides said Sunday that the current administration views a global regulatory system as a potential threat to competition among nations. That, in turn, could weaken the advantage the U.S. typically has enjoyed in many sectors over more-regulated European rivals in attracting investment. U.S. officials worry, for example, that an international super-regulator could seek restrictions on capital flows between countries and slow down the global move to increase free trade.
Administration officials also question whether a global regulator could regulate more efficiently than national ones. “It’s hard to imagine a super-regulator providing more oversight and supervision than German banking regulators, and yet they were surprised by the failure of their banks,” said a senior Bush administration official. “Being smarter and better doesn’t require a global finance cop.”
Europeans, meanwhile, appear to be worried that keeping a volatile United States in the world’s top financial position (this is the article’s take, not mine) will make for unstable global markets. France’s Nicholas Sarkozy, in particular, sounded interested in establishing a new world financial order to the tune of “we got into this mess together, let’s get out of it together.”
These discussions are about global economic regulation. The mere fact that world leaders are getting together to talk world regulation make domestic policies (nationalization, etc.) look tame.
I’m not enthused to hear about global economic regulation, even if it’s currently just talk. I don’t see many benefits to it. And we can’t vote on it–leaders engage in these practices unilaterally.