امور مالی شبکه جهانی : نوآوری سازمانی در بازار مالی جهانی

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.

The paper suggests that this emergent pattern is part of a broader reorganization of global financial markets with important implications for their future governance. Governance in this context is defined as the set of practices and institutions that form the basis for the collective expectations about how to operate in a given environment.1 It consists of formal rules and regulations adopted by lawmakers and regulators, but also of practices developed by market participants in response to these rules and regulations. Governance regimes often emerge and collapse without legal change. Conversely, legal change may aspire to shape or change governance, but may fail to do so. Only when law and other formal institutions become part of the collective expectations can one speak of governance, or an emergent governance ‘regime’. The need for a new governance regime for global finance has become apparent with the onset of the credit market crisis of 2007. This crisis revealed several fundamental problems of the existing global financial system. First and foremost, the crisis represents a case of massive market failure as indicated by the rise and fall of the shadow banking system and the inability of market actors to stem the increase of systemic risk.2 Secondly, the global financial crisis exemplifies a case of regulatory failure of a similar magnitude, as is evidenced by the patchwork of regulators within and across nation states that competed for attracting finance business, but lacked the political will and legal instruments to contain the systemic risk of interdependent global finance. Thirdly, the immediate policy driven responses to the crisis have been driven primarily by domestic concerns in affected countries with cross-border and global implications of such measures taking second place. Governance mechanisms at the global level were eventually mobilized, but in a rather ad hoc fashion. The meetings of the G20 in November of 2008 and April of 2009 signaled a growing recognition of the importance of global coordination; the organization of this particular group of countries suggests broad agreement that the institutional structures that in the past were mobilized in similar situations – the G8, the BIS, the IMF, and even the Financial Stability Forum (FSF) established in the aftermath of the East Asian financial crisis – were either ineffective or obsolete in their current incarnation.3 Historians of financial markets have long argued that the history of financial markets is a history of crises (Kindlegerber, 2005). Equally important, the history of financial crises is the basis too for the history of institutional change and governance reforms in response to such crises. It is no coincidence that the overhaul of the governance regime for securities markets in the United States in 1933–1934 was preceded by a stock market crash (Seligman, 1983). In the past, governance solutions have typically been devised at the national level. Even when global agents, such as the IMF or the Bank for International Settlement (BIS), were involved in designing governance regimes, their tasks were largely confined to promoting standardized solutions that had to be implemented at the national level. An open question is where solutions for a new governance regime will come from this time – given the truly global scope of the crisis and given the extent to which the crisis has undermined the credibility of the predominant governance model that preceded it. The most recent international financial market crisis prior to the current global crisis—the East Asian financial crisis of 1997–1998 and the subsequent emerging market crises in Russia (1998) and Latin America (2001)—did not face a similar dilemma. At the time it seemed obvious that the institutional solutions should be derived from ‘best practices’ in developed market economies, spearheaded by the US and the UK (IMF, 1995 and IMF, 2003). This belief formed the basis for policy advice by the International Monetary Fund (IMF), the World Bank, the US Treasury and others given to afflicted countries.4 In the current crisis, distinguishing between good and bad governance practices has become as difficult as distinguishing between good and bad assets. As Ben Bernanke, chairman of the US Federal Reserve following the announcement of a massive bail-out plan by the Federal Government on September 19th, put it, “there are no atheists in foxholes and no ideologues in financial crises”.5 While the political debate in the US Congress that surrounded the adoption of the “Troubled Assets Rescue Plan” (TARP)6 and subsequent measures may suggest otherwise, the lack of a dominant ideological paradigm is one reason for the lack of a simple blue print for a new governance regime. Instead, policy makers have turned to ad hoc measures to stem the fallout from the crisis (Davidoff and Zaring, 2008). The absence of a ready-made solution leaves open the question where to look for the material or the actors that will form a new governance regime for global finance. One place to look is to the actors themselves, that is, to the afflicted financial intermediaries and those that have come to their rescue. These parties did not have the luxury of postponing reforms until a political compromise could be reached, but had to respond to fend off the threat the crisis posed for their future and the future of financial markets. They include private banks from the West, their home governments, and Sovereign Wealth Funds (hereafter referred to as SWFs) from the Middle and the Far East. Beginning in early summer of 2007, a number of SWFs began to take substantial equity (or convertible debt) positions in what at least used to be some of the largest financial intermediaries in the West. In the fall of 2008 SWFs received company from the banks’ home governments. As a result of a series of bail-out transactions these governments have become sizeable shareholders in large banks located within their respective jurisdiction.7 Cumulatively these responses have created a network of equity ties linking the world’s largest financial players, i.e. financial intermediaries and sovereign investors ‘of last resort’,8 effectively giving the latter not only a stake in selected financial intermediaries, but through them—a stake in the global financial market. These network relations are therefore likely to affect how these markets will be governed in the future, even if the specific configuration of the network will change or most ties will be severed once the crisis has receded. This is the case, because the new cooperative governance solutions brought about by the crisis have set a precedent and as such are likely to influence the strategic behavior of actors in the future. Put differently, just as formal bankruptcy regimes have important ex ante implications (Bebchuk, 2002), so do informal workout solutions. Institutional innovation brought about by key actors in the market is a critical mechanism through which the new governance regimes evolve. When the credibility of a governance regime is undermined, as tends to happen in a major crisis, actors hedge not only their financial bets. They also hedge their bets as to what the new ‘rules of the game’9 for organizing economic relations might be. David Stark has termed this response to uncertainty about the institutional environment “organizational hedging” (Stark, 1996). Organizational hedging entails establishing relations with actors outside existing communities and established modes of practice. Newly formed relations create an opportunity for sharing information, experience, and practices, from which solutions for new institutions can evolve.10 A new governance regime emerges from this search process when these practices become institutionalized, that is, when they become part of the collective expectations of key players.11 While most transactions between banks and SWFs viewed in isolation can be rationalized as financial transactions between two autonomous players—one of which happened to be a SWF—they together with governments that injected additional capital now find themselves in a situation where they have few and potentially costly exit options at their disposal, both individually and collectively. Lest they risk another failure of a major global financial player, this new coalition of banks, SWFs and governments is forced to work out governance solutions collaboratively. This coalition bridges diverse systems of governance that previously operated mostly independently of each other. Specifically, SWFs represent a different mode of governance as compared to that endorsed by financial intermediaries in the West, i.e. one that gives government actors a key role in setting aside investment capital and determining strategies for its allocation. Their rise to fame in recent years in and of itself is indicative of the transformation of global financial relations and the hybridization of governance regimes that can no longer be easily categorized as private vs. public; state vs. market; or transactional vs. relational. The most visible evidence for this transformation is the rise of global imbalances between emerging markets that accumulated vast amount of reserves on one hand, and developed economies that accumulated substantial debt, on the other. A substantial proportion of the reserves are held in dollar-denominated asset, and a substantial part of it was recycled to finance the US’s private and public debt. As a result of this symbiotic relation, the rich North has become a net importer of capital ( Alberola and Serena, 2008; Prasad, 2007) primarily from exporters of natural resources and tradable goods. The countries that accumulated reserves in return have established new SWFs or directed existing ones to invest more aggressively in assets promising higher returns than US treasury bills; many shifted investments into finance just at the time when financial markets had passed their peak. With hindsight, SWFs (just as other investors) would have been better off had they adhered to the more conservative investment strategies most of them had followed previously ( Monitor, 2008). Their foray into global finance at this time exposed them not only to the risk of holding dollar-denominated assets, but more seriously, to the risk of a global financial system that found itself on the verge of collapse. This exposure has now positioned them to partake in the search for post-crisis solutions and to build a more sustainable governance regime. The paper develops this argument in several steps: Section 2 presents a taxonomy of transactions that has given rise to a global financial network and the actors that participate in them. Section 3 discusses social and economic theories that emphasize the role of organizations as modes of governance and analyzes the contributions inter-organizational networks can make to governance. Section 4 develops the notion that networks can be understood as a form of organizational hedging, which in turn can give rise to institutional innovation and change. Section 5 presents two case studies that illustrate the new forms of cooperative governance among diverse players in the global financial market place. Section 6 concludes.