Columbia International Affairs Online: Policy Briefs

CIAO DATE: 11/2013

Arbiters Amiss: The Failings and Shortcomings of Institutions Governing the Global Financial System

Paul Blustein

October 2013

Centre for International Governance Innovation

Abstract

In this policy brief, Paul Blustein highlights key points from his newly published book, Off Balance: The Travails of Institutions That Govern the Global Financial System, which provides a detailed look at the inner workings of the International Monetary Fund and Financial Stability Board during the run-up to and early months of the global financial crisis. Blustein's research, which included interviews with scores of policy makers and examination of thousands of pages of confidential documents — memos, emails, meeting notes and transcripts — to which he obtained exclusive access, points to dispiriting conclusions about the ability of these institutions and the world’s major countries to coordinate the policies necessary to generate a balanced, sustainable global recovery and prevent future crises, and lays bare the institutions’ chief weaknesses: they are unable to accurately discern where and how crises are likely to arise; and they lack the power, and often the will, to stop countries from pursuing policies that threaten financial stability.