The allure of Asia
On the face of it, international financial authorities have become more global since the 2008 financial crisis. The pan-world G20 has taken over from the Western G7 and non-Western economies have more say on the Financial Stability Board (FSB) and the Basel Committee on Bank Supervision. Even the Washington twins, the International Monetary Fund and the World Bank, are adjusting.
But much remains to be done. Of the 25 top full-time and part-time positions at the 11 main global financial authorities, 20 are held by Westerners, and only three – 12 percent – by Asians. That’s less than half the current Asian share of global GDP, and far less than the region’s share of growth. What’s more, not one of those global financial authorities has its headquarters outside of the West.
The leaders of each institution can make a perfectly good case to keep it where it is. Moving is costly and joint work among the authorities is easier if they’re close at hand. The Europeans can add that their business day overlaps with both Asia and the United States.
But according to this logic, no global financial authority will ever be located in Asia. That relegates Asians to more than their share of the exhausting intercontinental journeys required for global meetings. Towards the end of the second 12-hour flight in a week, it’s hard not to think that you’re a victim of global prejudice, even if you’re sitting in business class.
The G20 leaders have an almost ideal opportunity to improve the balance. They will discuss the future of the FSB at the mid-June summit in Los Cabos, Mexico. The regulator, based in Basel, Switzerland, is set to become more separate from its sponsor, the Bank for International Settlements. Why not move the FSB’s permanent secretariat, a group of about 20 professionals, to Asia? It would be a small step in the right direction.
Hong Kong, Seoul, Singapore, and Tokyo all have the air links, political stability and amenities needed to attract the right staff. The Swiss might resist, but it would ultimately gain from more equitable global financial policymaking. So would all Western players.