International Financial Regulation and Disruptions to International Trade

Financial ties between countries provide the foundation for international trade, yet international cooperation on trade and finance remain largely separate from each other. This paper examines a key consequence of the failure of international institutions to keep pace with globalization: the impact of international financial regulation on trade flows. In the aftermath of the 2008 global financial crisis, international institutions imposed new rules on the international banking sector. But the institutions issuing these standards aimed to reduce financial risk without considering the potential impli-cations of such measures for international trade.