The Contemporary Surveillance Regime

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The Contemporary Surveillance Regime
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What is lecture actually on?

• Myriad of Institutions that set and monitor the
  adherence to global norms of good governance
• The importance of system of norm setting and
  monitoring lies in its totality
• The critical importance of individual aspects of
  the regime can be contested.

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• Subjective judgements about what institutions to
  include. You could include thousands
• This lecture will look at six sets of
  institutions (IMF, OECD, Credit Ratings
  Agencies, BIS, IOSCO, IASB)
• Some are public and some private

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• The unifying feature is focus on information
• Implicit and ideational power as opposed to overt
  coercive power. Contrast to World Bank and WTO
• In many areas of social life norms are more
  important than rules in regulating behaviour.

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Structure of the Lecture

• Section One IMF and OECD
• Section Two Credit Rates Agencies
• Section Three Bank of International Settlements
  (BIS)
• Section Four IOSCO and IASB
• Section Six Conclusion

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IMF

• Established by 1944 Bretton Woods Conference came
  into being in 1945
• Manage exchange rate system and assist countries
  with liquidity problems
• Crisis of purpose in the 1970s
• Activities come to be confined to Third World and
  its role merged with World Bank

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• Marginalised by Bank in long-term restructuring
  in 1990s
• Management of recent crisis has been heavily
  criticized, fairly or unfairly (Asian 1997, and
  most significantly Argentina in 2001. Successful
  default against IMF advice)
• Future role unclear after 2001 and for a lot of
  analysts institution is finished.

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• I disagree. Since 2001 IMF transform itself from
  crisis manager to an agent of transparency (fits
  New Financial Architecture).
• Sets informational standards SPASS
• Also IMF Selected Issues
• The IMF defines standards and monitors adherence
  to them

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• A lot academic analyse (Mosley) is sceptical
  about the importance of the SPASS and the ability
  of the IMF to redefine itself
• This reflects weaknesses in their analyse.
• Focus almost exclusively on global market and
  ignore internal politics

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• Club of advanced capitalist economies and leading
  emerging markets (30 countries- democracy and
  market economy, established in 1961)
• Paris based collective of economists ()
• Seeks legitimacy through technical competence and
  formal apolitical status

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• Produces (v readable) reviews of policies of each
  member economy every 1-2 years and specialist
  issues papers
• Strong neo-liberal institutional mindset since
  late 1970s

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• Members countries use the institution to
  legitimate particular policies
• See particularly employment, regulatory reform
  and corporate governance
• Particular political decisions to adopt certain
  policy are transformed into technical decisions

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• OECD has been particularly important in defining
  the agenda in 3 key areas
• Labour Markets (OECD Job Study), Regulatory
  Reform, Corporate Governance
• OECD succeeded in defining Neo-Liberal
  Regulatory Systems and frameworks of Corporate
  Governance as good systems of governance and
  regulation.
• Particularly important in crisis.

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• Particular political decisions to adopt certain
  policy are transformed into technical decisions
• OECDs is an agent of Depoliticisation
• Monitoring becomes a way of locking in reforms
  and empowering certain state elites
• It is not impossible to ignore the OECD but you
  have to explicitly justify why.

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Section Two

• Credit Rating Agencies
• Private Institutions. Main ones are American
  (Moodys and SP) 3rd French
• Rate 30 trillion debt in 2005
• Empowered by public regulation
• Ability to affect capacity of (most) core
  capitalist states to raise finance is not
  necessarily critical. Japan, but..

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• Material significance is much greater in relation
  to local government, firms and non core
  capitalist states
• Judgements about policy stance, economic
  prospects as current financial position
• Negative impact on certain low income American
  cities (Philadelphia)

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• Credit Rating Agencies promote municipal
  neo-liberalism
• Neo-Liberal reform outside the core
• Particular patterns of corporate organisation are
  rewarded and some punished.

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• Credit Ratings Agencies agents of neo-liberalism
• This is not conspiracy theory. I not assuming its
  conscious

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Section Three

• Old informal conservative club of central bankers
• Based in Switzerland
• Secretere play a key monitoring role
• Important institution within the institution is
  Balse Committee on Central Bank regulation (10
  members)

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• Define appropriate standards for international
  active central banks
• Principles translated into national regulatory
  regime
• Market makes adherence to principle mandatory for
  all international active institutions. Principles
  power goes beyond its agenda setters

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• Ability to define sound practice is source of
  material power.
• Basel II Basel II International Convergence of
  Capital Measurement and Capital Standards a
  Revised Framework (http//www.bis.org/publ/bcbs107
  .pdf).
• Shift towards risk based regulation (following UK
  lead )

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Section Four

• IOSCO(International Organisation of Securities
  Commission) Grew out of 1974 Inter American
  Institution. US SEC is understood as dominating
• Transparency and information sharing
• Capital Standards for Market Operators

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• Finally, international accounting standards.
  International Accounting Standards Board (IASB).
  Effectively private institution
• Effectively promote and legitimate US system as
  sound. Wants global convergence around this
  system. Their standards create important point of
  reference for reforming elites (particularly in
  wake of crisis. Interacts with other
  institutions)
• Both these institutions present political as
  purely technical

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Conclusions

• The importance of regime is easy to
  underestimated
• Unevenly and in many cases badly studied
• Its significance is partly disguised by reliance
  on norms and unofficial power

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• In sense its partially invisibility is its
  strength. Many of the norms promoted simply come
  to represent common sense. For example, data
  transparency. Frame limits of our thinking.
• Regime is successful in defining parameters of
  reform and range of permissible solutions to
  problems. Provide important political support to
  key groups.