Making Financial Globalization

Abstract

Why did financial globalization occur? Finance has traditionally been local and state controlled. However, around the turn of the century, over a hundred countries---even those without comparative advantages in financial services---agreed to open up their financial markets to foreign banks, insurers, and securities firms. Making Financial Globalization offers a novel account of business and politics in which firms engage in multilateral lobbying to create a new international agreement that would lower entry barriers around the world. Firms formed coalitions across industries and countries and helped shape the new international regime in trade in financial services. In turn, governments liberalized their financial market to bring external capital into their economy and subsequently embarked on domestic regulatory reforms to lower their entry barriers. The book upends the traditional view of the dominance of state actors in regime creation and shows how firms increasingly shape international economic policies.