International financial regulation: Why it still falls short

Previously a Working paper posted by INET, this article has now been published as a chapter in a book called “The next money crash and a reconstruction blueprint”. Edited by Uli Kortsch, the book makes the case that economic systems in which private banks (and shadow banks) effectively create money are inherently prone to crises of increasing seriousness. It effectively argues for a modern version of the Chicago Plan that replaces bank-created-money with sovereign-created-money. White’s paper helps document many of the problems generated by the current system and why monetary and regulatory policies have not been able to overcome them. He also lists a number of reforms, in order of their ease of implementation, that could in principle reduce the need for more radical reform. White finishes by noting that monetary reform at the national level is not enough. We also need to reform the International Monetary (Non) System.