                                                                                                                                                                                                                       _.                   OF THE NEW INTERNATIONAL FINANCIAL ARCHITECTURE                                                                                                                                                                                                                                                                                                                                             •        f                                                                                                                                         Contents                   4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   4),                                                                                                                                                                                                                                                                                                                                                                                                                                                              l                                                                                                                                                                                                                                                                                                                                                                                                                                                                  C                                                                                                                                                                                                                                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largest financial market of its kind in the world At the centre of the market are 38 major investment and commercial banks who are certified of New York as primary dealers by the Federal Reserve Bank the choice of inner circle with which the Fed [Federal Seen from the above perspective, the upshot of the US-led Reserve Bank of the US] conducts it official monetary business At the campaign... other compames abroad or In the words of the former Secretary of the Treasury Department, Robert Rubin, in reaction to Indonesia's economic woes in 1997, The New International Financial Architecture Transcending 'Common Sense' 'Financial stability around the world is critical to the national secu­ the structural power of the us vis-a.-vis international fmance and IO rity and economic interest of the. .. economic effects of the restructur­ ing policies, particularly their increasing exposure to higher levels of competition through the liberalization of trade, shifted their support to the right-wing, pro-business party, PAN (the party of the current President Fox) The upshot of this swing of political support away from the PRI was that in the 1 988 elections the PRJ took a substantial beating at the polls... every 1,000 of massive attempts by companies to trim costs, usually by layi�g off - the highest rate in the 30 years that the association has been workers, sales have not kept up with the pace of output Further mvest- monitoring mortgages'.34 14 The New International Financial Architecture Transcending 'Common Sense' Consumers and corporations are not alone in their growing de­ 15 the state of the US dollar... oriented financial capital, a weakness that is re-addressed below The Frankenstein factor has distinct resonance in the South Through the past fifteen years of imposing the imperative of free capital mobility in the Southern hemisphere, the neoliberal-Ied Washington consensus has increased exponentially the power of international financial markets not only over states but also over the most powerful of them... the et ect.61 Y the Zapatista rebellion was not the NAFTA came into eff ers to as a 'crisis the materialization of discontent that Gramsci ref of authority' 62 Alongside numerous protests by the peasantry, who belong to the lowest economic echelons of Latin American societies, other 50 The New International Financial Architecture The Mexican Peso Crash 51 expressions of the loss of ruling-class consensus... creditors One of the roots of the crisis of years of neoliberal rule, than af ter the 1982 crisis According to authority of the neoliberal state was the rising level of poverty in government statistics, by the end of the 19905, poverty rates were Mexico; for example, 'In 1992, 23 6 million lived below the poverty hovering at around 54 per cent of the population.69 As the country line; in 1994, the figure... national self-determination), �lay result in increased economic problems and higher levels which of pohtlcal repression in the South:11 Taken together, both points �onverg� � on what Strange refers to as the core problematic of mtern tlonal political economy: 'the tension between the principle of natIOnal self-determination and the principle of openness in the The New International Financial Architecture. .. maquiladoras are an eff ective means of overcoming nar­ to the second prong of Mexico's continental rationalization strategy: rowing margins of profitability For example, 'the profit share rose the financialization of the economy The New International Financial Architecture The Mexican Peso Crash roughly 20 percentage points higher than the Financialization in Mexico According to neoclassical economics,... rom the rejection of adopting capital account convertibility, another indication of the growing discontent with and progressive Nonetheless, the fact that an increasing number of leaders f rom the 'lef are coming to power af t' ter about two decades of neoliberal rule points to the growing discontent of the critical masses, and, relatedly, to a crisis of authority in the South On the other hand, there .              _.                   OF THE NEW INTERNATIONAL FINANCIAL ARCHITECTURE      