Global network finance: Institutional innovation in the global financial market place
The global financial crisis that began in 2007 revealed a fundamental weakness in the global financial system: extensive financial interdependence of financial relations unmatched by a governance regime of similar reach. As multinational banks sought to fortify their capital base in the wake of the unfolding crisis, Sovereign Wealth Funds (SWFs) and the banks' home governments have become mutual stakeholders in some of the largest financial intermediaries with global reach. From the multitude of individual transactions has emerged a network of equity ties that spans the globe. These ties bridge institutional practices and governance regimes that previously operated largely independently of each other. They have the potential of fostering the emergence of a new governance regime for the global financial market place that deviates from earlier prognoses that globalization entails convergence on a single governance model. Instead, the newly created ties that jointly add up to a global financial network enable institutionally and organizationally diverse players to contribute their own perspectives as joint stakeholders in selected financial intermediaries, and indirectly, in the global financial system. This is likely to have important implications for the behavior of these actors in the future and the emergence of new governance solutions for the global market place. The paper discusses two recent cases of collaborative re-capitalization events to illustrate how this regime is evolving in practice.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lucian Arye Bebchuk, 2002.
"Ex Ante Costs of Violating Absolute Priority in Bankruptcy,"
Journal of Finance,
American Finance Association, vol. 57(1), pages 445-460, 02.
- Lucian Arye Bebchuk, 2001. "Ex Ante Costs of Violating Absolute Priority in Bankruptcy," NBER Working Papers 8388, National Bureau of Economic Research, Inc.
- Bebchuk, Lucian Arye, 2001. "Ex Ante Costs of Violating Absolute Priority in Bankruptcy," CEPR Discussion Papers 2914, C.E.P.R. Discussion Papers.
- Andrei Shleifer & Robert W. Vishny, 1995.
"A Survey of Corporate Governance,"
Harvard Institute of Economic Research Working Papers
1741, Harvard - Institute of Economic Research.
- Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817, March.
- Khanna, Tarun, 2000. "Business groups and social welfare in emerging markets: Existing evidence and unanswered questions," European Economic Review, Elsevier, vol. 44(4-6), pages 748-761, May.
- Roland Beck & Michael Fidora, 2008.
"The impact of sovereign wealth funds on global financial markets,"
Occasional Paper Series
91, European Central Bank.
- Roland Beck & Michael Fidora, 2008. "The impact of sovereign wealth funds on global financial markets," Intereconomics: Review of European Economic Policy, Springer, vol. 43(6), pages 349-358, November.
- Barth, James R. & Caprio Jr., Gerard & Levine, Ross, 2001.
"Bank regulation and supervision : what works best?,"
Policy Research Working Paper Series
2725, The World Bank.
- Grossman, Sanford J & Hart, Oliver D, 1986.
"The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration,"
Journal of Political Economy,
University of Chicago Press, vol. 94(4), pages 691-719, August.
- Grossman, Sanford J & Hart, Oliver, 1985. "The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration," CEPR Discussion Papers 70, C.E.P.R. Discussion Papers.
- Grossman, Sanford J. & Hart, Oliver D., 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Scholarly Articles 3450060, Harvard University Department of Economics.
- Oliver Hart & Sanford Grossman, 1985. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Working papers 372, Massachusetts Institute of Technology (MIT), Department of Economics.
- Ming Zhang & Fan He, 2009.
"China's Sovereign Wealth Fund: Weakness and Challenges,"
China & World Economy,
Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(1), pages 101-116.
- Zhang Yuxuan & He Fancass, 2008. "China's Sovereign Wealth Fund : Weakness and Challenges," Finance Working Papers 22836, East Asian Bureau of Economic Research.
- Zhang Yu Xuan & He Fan, 2008. "China's Sovereign Wealth Fund : Weakness and Challenges," Development Economics Working Papers 21985, East Asian Bureau of Economic Research.
- Gabriel Enrique Alberola & José María Serena, 2009. "Sovereign external assets and the resilience of global imbalances," Banco de Espa�a Working Papers 0834, Banco de Espa�a.
- Prasad, Eswar & Rajan, Raghuram G. & Subramanian, Arvind, 2007.
"Foreign Capital and Economic Growth,"
IZA Discussion Papers
3186, Institute for the Study of Labor (IZA).
- Leff, Nathaniel H, 1978. "Industrial Organization and Entrepreneurship in the Developing Countries: The Economic Groups," Economic Development and Cultural Change, University of Chicago Press, vol. 26(4), pages 661-75, July.
- Colin Mayer & Julian Franks, 2002.
"The Origination and Evolution of Ownership and Control,"
Economics Series Working Papers
2003-FE-01, University of Oxford, Department of Economics.
- Franks, Julian R & Mayer, Colin & Rossi, Stefano, 2003. "The Origination and Evolution of Ownership and Control," CEPR Discussion Papers 3822, C.E.P.R. Discussion Papers.
- Katharina Pistor & Martin Raiser & Stanislaw Gelfer, 2000. "Law and Finance in Transition Economies," CID Working Papers 49, Center for International Development at Harvard University.
- Lucian A. Bebchuk & Reinier Kraakman & George Triantis, 2000. "Stock Pyramids, Cross-Ownership, and Dual Class Equity: The Mechanisms and Agency Costs of Separating Control from Cash-Flow Rights," NBER Chapters, in: Concentrated Corporate Ownership, pages 295-318 National Bureau of Economic Research, Inc.
- Lucian Arye Bebchuk, 1999. "A Rent-Protection Theory of Corporate Ownership and Control," NBER Working Papers 7203, National Bureau of Economic Research, Inc.
- Katharina Pistor & Martin Raiser & Stanislaw Gelfer, 2000. "Law and Finance in Transition Economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(2), pages 325-368, July.
- Peter Kunzel & Cornelia Hammer & Iva Petrova, 2008. "Sovereign Wealth Funds; Current Institutional and Operational Practices," IMF Working Papers 08/254, International Monetary Fund.
- D. Stark, 1996. "Recombinant Property in East European Capitalism," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 6.
- Katharina Pistor & Martin Raiser & Stanislav Gelfer, 2000. "Law and finance in transition economies," Working Papers 48, European Bank for Reconstruction and Development, Office of the Chief Economist.
- Masahiko Aoki, 2001. "Toward a Comparative Institutional Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011875, June.
When requesting a correction, please mention this item's handle: RePEc:eee:jcecon:v:37:y:2009:i:4:p:552-567. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.