Abstract
This paper focuses on international aspects of accounting and auditing; data collection and dissemination; legal processes and institutions, especially for insolvency and bankruptcy; and the prudential supervision and regulation of financial institutions (for short, “prudential oversight”). The governmental institutions in these areas together constitute what may be termed the collective-governance infrastructure for financial activity. The paper first identifies basic issues and problems in these areas, and then suggests general principles that should guide international cooperation in formulating standards and prudential oversight at the world level. Significant progress has been made in these areas in recent years, and a section of the paper summarizes that progress. The final parts of the paper discuss some controversial issues that remain to be resolved: the allocation of responsibilities among international financial institutions, adoption by individual nations of international accounting standards, the introduction of collective-action clauses into bond contracts, and the evolution of capital-adequacy requirements for banks. The material in the paper is drawn from the author’s book manuscript currently in preparation, Turbulent Waters: Cross-Border Finance in the 21st Century, to be published by the Brookings Institution in 2000.
