The Case for Divergence in the Governance of the Global Economy Sovereign Rules for Finance, Global Rules for Trade

At its inception, the G-20 provided important crisis management and a co-ordinated response to the subprime crisis of 2007-9. It has as yet however, prior to and up to the latest Cannes Summit, failed to establish itself as an agent of crisis prevention. In contrast to the majority of analysts that lament the inability of the G-20 to come forward with global rules for global finance, we will advance the heretical suggestion that this represents an opportunity rather than a problem. We suggest that diversity in financial regulation and what the Warwick Commission (2009) identified as the benefits of an ‘unlevel playing field’ would enhance, rather than weaken, the longer term stability of the international financial system. Financial regulation should and, for reasons we will explain via some important reminders of the historical and theoretical origins of sovereignty, will remain principally the preserve of national states.