Global Finance after the Crisis: Which 'Rules of the Game'?

This paper provides a sketchy reconstruction of past, describing how financial crises were intertwined with state policies and institutional reforms. Today, when global financial actors deal with global instruments in a variety of local situation and transnational policy instruments are missing, the nearest substitute available for global financial governance is international cooperation, mostly consisting in supporting the hardest-hit countries and in adapting the “rules of the game” to the new crisis situation. The actual inability to prevent crises shows not so much lack of motivations to cooperate or unwillingness to contribute, but more fundamentally the lack of “technology” for cooperating. Curiously, the building of the recent crisis occurred during years in which consensus was wide, but its content inadequate: too many agents, public and private, shared the view that impersonal financial markets were resilient enough to digest all news, and flexible enough to accommodate shocks. But in reality financial systems are not "anonymous mechanisms", where risk aversion can be satisfied by just shortening the time horizon of financial connections. Back to basics, finance is an essentially relational phenomenon, and trust has to be gained by investing in meaningful personalized and durable relations. How this ultra-micro dimension connects to macro financial developments largely remains to be explored, but is essential for a meaningful financial system to emerge. Admitting that we do not know how to prevent the next crisis can be the first step in resisting conventional wisdom and rethinking finance, back to basics: a resistance that is, above all, cultural in nature.