Former Appellate Body Member Jim Bacchus would like to see a "financial GATT," but not a "financial WTO":
U.K. Chancellor of the Exchequer Alistair Darling has summed up the case for international coordination. "If everyone does their own thing it will achieve absolutely nothing. The banks are global -- they are quite capable of organizing themselves in such a way that if the regime is difficult in one country, they will go to another one, and that doesn't do anyone any good."
We need a multilateral solution. What should it be?
Some have suggested a "financial WTO," an international approach akin to the World Trade Organization that would establish and uphold international rules for financial governance. This seems to me to be an acronym too far for the world in which we live.
There is need for international governance. There is also continuing need for national control and national flexibility.
What the world needs now is not a financial WTO but a "financial GATT." We need the international cooperation and coordination of the WTO, but we also need the considerably wider latitude for national discretion that was afforded by the WTO's predecessor, the General Agreement on Tariffs and Trade.
New and better international standards are needed on capital, liquidity, transparency, accounting, pay and more. We need a level financial playing field worldwide. Sovereign countries must, however, retain the right to structure, support, regulate and oversee the actions of financial institutions in their own jurisdictions in their own way.
There is no need at this time to create some grand new international institution for global financial governance. There is urgent need for early international agreement leading to effective international action.