Global Finance and the European Economy: The Struggle over Banking Regulation

Abstract

Within critical IPE, there is an overall consensus that the process of financial deregulation is driven by the so-called global Dollar Wall Street Regime (DWSR). Succeeding the Bretton Woods System (BWS), which orchestrated international financial and monetary relations during the post-war decades, this new regime is fundamentally different in quite a few respects (Gowan, 1999:19-38). First, the regime is mainly based on two pillars — a de facto dollar standard and Wall Street, synonymous for a liberalized and very attractive US financial market — which mutually reinforce each other. Second, the DWSR represents less a negotiated and quasi-legal regulatory framework, but rather a particular material power structure underpinning the neoliberal priorities and rules of international monetary and financial relations. And, finally, by promoting financial liberalization worldwide the regime facilitates the penetration of other economies by foreign capital in order to incorporate them into the domestic capital circuit of the USA (Seabrooke, 2001; Cafruny and Ryner, 2007b: 24–5).