International Trade and Finance Law Essay Example | Topics and Well Written Essays - 1750 words

International Trade and Finance Law - Essay Example Not relying on the fact that crisis was caused by retarding market demand and financial mishap rather than ostensible anti-inflammatory guidelines, as has been the crisis case since 1945. Japan is the only nation among stable economies accustomed to this type of recession and this is as a result of the past-bubble downfall of the 1990s. For emerging economies, the case was quite different, as much it may have been associated with a rich economy: emerging economies had a deeper conventional trend that begun by a flow in inflation in 2008, which made many Asian countries to adopt tough anti-inflammatory regulations. Then the effects of such policies were witnessed at world trade level after Lehman and associates went bust in 2008; this saw poorer countries in Latin America and Africa feel the hitch of shortage of raw materials from China and India. Several players are behind the crisis that took the world by storm. One of the major bodies that are keenly looked at is the International Centre for Financial Regulation (ICFR). Based in London, ICFR was formed by U.K government in collaboration with international financial institutions with an aim of monitoring financial activities and coming up with international policies that would guide matters related to finance across the globe1. ICFR has been mandated to form laws that will enhance proper trade and should guide the global economy. Critics have been concerned about how such bodies carry out their activities; this is as a result of constant financial rescissions that have rocked the globe in the recent past. Some argue that such bodies should be abolished so that each country forms its own rules to govern trade. Other critics argue that the institution should consider reviewing its policies so as to avoid such crisis. ICFR members are claiming not to be blamed future expectations are unpredictable and cannot be fixed while coming up with such regulations. Even though the ICFR may defend its reputation, outcry has persisted and several fingers pointed towards the organization. Some of crisis effects such as guarantees and bail-outs have proved the organization to be unstable. Much of consequent regulatory agenda debatably reflects the need to tackle such weaknesses rather than implementing well investigated optimum governing solution. As a result, high leverage that was manageable only under circumstances of growing investor confidence and asset price is considered to be a weakness form the body. Weak governance, remuneration and accountability culture within financial bodies has been a factor as well behind downfall of the organization. Some analysts accuse the organization of hysterical and unorganized creation of liquidity to imbalance and motivate countries to invest in financial assets present in deficit countries. Other organizational weaknesses are pointed out they need attention to avoid plunging the world economy in such financial jeopardy; these include but not limited to: emergenc e of increased and uncontrolled ‘shadow banking’ segment and adoption of complicated financial tools and techniques that made risk disperse all over the global financial division and relevant interdependencies created, as well as missing public information on the extent and distribution of risk occurring in the financial system. Some commentators characterize the emergence of these, at least not wholly, to