Disembedding and Regulation : The Paradox of International Finance.

The financial crash of 2007-8 is the latest and greatest of the crises resulting from the process of `financialisation’ of the past 30 years. The breakdown of the Bretton Woods system in the early 1970s unleashed a process of liberalisation and internationalisation of finance, and a shift away from relationship-based to market-based finance, led by the UK and the US, acting in tandem as the dominant centres of global finance. Although often described as a period of deregulation, the disembedding of finance through liberalisation was accompanied by an enormous growth of formalised regulation. Although it has been generally reactive, and continually amended and reformed, regulation has mediated the processes through which the competitive and dynamic processes of change have been contested. The proliferation of regulation was national in focus, but it developed as an international process, through networks of regulators and specialists, who developed principles and standards, changing rapidly, usually under the impact of scandals and crises