Plenary Session: Global Financial Networks
Organizer: Fenghua Pan (Faculty of Geographical Science, Beijing Normal University)
Global financial networks (GFN) is a novel framework to understand how global financial landscapes have been shaped. This session will provide a full illustration of the key components of GFN, their relationships and power in the world. Some new factors including the rise of China and technology which might reshape the global financial landscape will be discussed. In particular, the role of law firms, a typical advanced business service (ABS) agents as one key component of GFN, and new forms of legality in offshore finance will be examined through the case of US’ attempt to build a transnational legal order to address offshore financial crimes in the context of Asia.
Sticky Power: Global Financial Networks in the World Economy
Daniel Haberly, Lecturer, Centre for Global Political Economy, University of Sussex
Why is the shift of power from the US to China so slow? Why, over ten years after the shock of the global financial crisis, do financial institutions remain so powerful, with booming financial centers and offshore finance? Can technology accelerate this shift and disrupt the incumbent powers? In this presentation, we elaborate on Global Financial Networks as a novel analytical framework to address these questions. These are networks of financial and business services,
the world’s leading govern
ments, financial centres and offshore jurisdictions, closely interlinked with each other at the heart of the world economy, holding financial, economic, political and cultural power. Our research shows that despite significant changes in the organization of Global Fi
nancial Networks since the crisis, their power has been very sticky. China is gr
owing into these networks, rather than simply challenging them. Meanwhile, new technology threatens to increase rather than disrupt the concentration of power in leading institutions and centres. Analyzing the world economy and power through the lens of Global Financial Networks helps us understand why in 2018 we still in many respects live in the ‘long twentieth century’.
Dariusz Wójcik, Professor of Economic Geography, School of Geography and the Environment, University of Oxford
Offshore financial governscape: Transnationalizing US legality in Asia
Jessie P.H. Poon, Professor, Department of Geography, University at Buffalo
Since the 1990s, private authority has been the main institutional expression in governing of offshore finance. A private form of legality relies on delegation of authority to non-state actors, particularly authority that draws on the expertise of global advanced business services (ABS) professionals. This has ensured that specialized financial practices (e.g. risk management including taxation risk management) are embedded in states’ legal semantics, aided largely by cognitive norms that underscore the global financial networks of ABS actors. The past decade, however, has seen the extraterritorial expansion of United States’ (US) public authority: formal law has become US’ chief institutional mechanism for influencing offshore financial behavior. This removes law from national and sovereign states under the presumption of “good governance” and “new constitutionalism”. In particular, taxation risks have acquired a geopolitical character capturing the policing of not just money laundering and terrorist financing, but human rights infractions, national security concerns and other “national emergencies”. In turn, the US has become a principal arbiter of offshore financial norms. This paper will examine new forms of legality that are shaping offshore finance in Asia, highlighting the case of financial centers like Singapore. I argue that emerging public forms of authority have strengthened the role of certain ABS actors calling attention to the role of legal agents in the making of public, not just private, authority.