Capital Rules: The Construction of Global Finance; Regulating Capital: Setting Standards for the International Financial System

These books on the evolution of the global financial system, both by political scientists, complement each other nicely. Abdelal examines the evolution since 1945 of thought and practice with respect to international movements of capital, culminating in the aborted effort in 1997-98 to enshrine full freedom of capital movements in the Articles of Agreement of the International Monetary Fund, which was abandoned (some would say postponed) in the wake of several financial crises during that period. He finds that the prime advocates of freedom of capital movements were not neoliberals in Anglo-Saxon countries but rather European officials committed to unifying the European market in all respects. These Europeans were also concerned with the distributional consequences of then existing capital controls and with their bias against the middle class.

Singer focuses on the financial regulatory process in major industrial countries; the tensions between regulatory prudence and international competitiveness; the constant possibility of legislative intervention, especially after financial crises; and the efforts by national regulators to preserve their autonomy through, paradoxically, the international negotiation of common norms. He discusses well the attempts of major countries over the past two decades to frame common positions, which were partially successful in the case of banking, less so for the securities and insurance industries. Both books provide useful background on the unresolved issues of international finance.