Please enable JavaScript.
Coggle requires JavaScript to display documents.
Supranational Bodies - Role and Future (Future (Fragmentation of European…
Supranational Bodies - Role and Future
Introduction
All principally there to promote common objectives. Yet the role of Supranational Bodies has changed shape, now used as a political and economic tool to exert power and supress other nations
An association of three or more states that work to benefit and promote all member states, going beyond the scope of their single nation
Predominantly established in a response to WW2 to promote peace and stability
Losing sight of main aims
Becoming political and economic world power
IMF
lender of last resort. Provides liquidity however, encourages moral hazard/too big to fail
role of supranational bodies has become polarised
Deepen and broaden the provision of financial services
purpose
Stability
Political
IMF
Promote financial stability and give advice on how to achieve economic stability, prevent financial crisis and improve living standards
Help governments
help support local/domestic gov. policies
World Bank
advises on gov fiscal policy
IMF
advise government on monetary policy and ensure responsible lending
Economic
European Union
2 out of 27 countries either in the Eurozone or adopted the Euro - price stability
Not good for monetary policy as interest rates have to remain the same regardless of the economic cycle stage in each country in the Eurozone
IMF
Require member countries to inform the IMF of any monetary policy changes - reduces shocks
works with member countries to modernise economic policies and institutions
April 2009 IMF strengthened its lending capacity and had a major overhaul of its financial support mechanisms
become regulators -
lender of last resort now (no longer CB)
Macro-convergence of economic policy
IMF
and
G20
- stable political regimes, however, greater risk of contagion
OECD
Regulatory framework
G20
combat financial crime and tax evasion (impact on IFC)
FATCA - global reach
CRS and EU - US not signed on
global regulated approach
Do we need a global regulator?
Trade
Aid wealth creation and economic development, lift people out of poverty
WTO
- regulates international trade - fair, increases transparency, resolves trade disputes, facilitates negotiation
New Development Bank
- promote trade and cooperation BRIC countries
Economic Development
World Bank and New Development Bank
- loans to developing countries for infrastructure
European Union
- Single Market trading bloc
IMF
facilitate the expansion and balanced growth of international trade
Promote Peace
UN
core objective is to promote peace and stability
EU
WW2 development (now more focused on trade - single market, euro) now use sanctions
Forum for negotiations
Sanctions
Impact on Russian clients (CDD in financial services)
Prohibits certain banking, energy and defence state owned enterprises from accessing western financial markets
End war and conflict as countries have a vested interest
Future
Fragmentation of European Union - once a massive trading bloc
Rise of New Development Bank - power of BRIC
Shift in political power to the East - NDB and wealth creation
Populist politicians questioning role of supranational bodies - Trump, Corbyn, Le Pen
Rise of Asia
Increased scrutiny
Macro-divergences - UK lower interest/US increase interest rates
trade and growth of supranational bodies is heavily influences by geopolitical and macroeconomic events
war and financial crises - countries look inwards to become self sufficient -- the supranational bodies lose power when not supported by country's governments/member states
Humanitarian Aid
Lifts people out of poverty
UN
helped to recover after WW2, now relied upon today for helping with natural resources
IMF
Help to fight poverty
Global Civics
Solve World Problems
Climate Change - Paris Agreement G20
United Nations
Politics
While the primary focus of most supranational organizations is to ease trade between member nations, it may also have political implications or requirements. For example, it may require that all member nations participate in certain political activities, such as public election for leadership.