Global financial governance: public good under fragmentation

Finance is among the most influential activities in our economies and societies. Financialisation – the embeddedness of finance into our social, economic, and political life – is progressing. Large parts of finance are being determined and performed on the global level. We point out the ‘public good’ qualities of global financial governance. Stability is the prominent example. We briefly describe the global financial architecture and show that contrary to its importance, current global financial governance is fragmented in several aspects. For example, no central global financial institution exists to set and enforce formal global rules on finance. Therefore, we argue that better regulatory governance at the national, regional, and global level is of great importance, not only because it can bring more stability but also because it can bring more sustainable growth and a fairer, more equal world, while also improving the life chances of millions who live in poverty.