The financial crisis that started in 2007 has led to renewed policy discussions on the governance of the global financial system, parallel to the rescue efforts of banks and countries. Two main planks of reform have been the supervision of banks (capital adequacy standards) and the resolution of sovereign debt crisis. At the time of writing, the policymaking process in these two issue areas has resulted in a landmark renewed Basel Capital Accord (Basel III), while the outcomes with respect to sovereign debt crisis resolution mechanism are as yet unclear. The scale and impact of the current crisis leads one to wonder whether it will lead to a break in the trend towards more market-based in patterns of governance in the global financial system. This leads to the main question of this paper: how can we explain the shifts in governance in the governance of bank capital adequacy and sovereign debt crisis resolution? In other words, which characteristics – especially ideational underpinnings – of the policymaking process explain the outcome? This question will be answered by an analysis of the policymaking process in the two issue areas mentioned above. The characteristics of the post-crisis process will be set against previous negotiations in the 90s and early 21st century (as analysed in Blom 2011). Special attention will be given to the skewed argument pool which has emerged in the exclusionary policymaking institutions of global financial governance and whether that pattern has been broken by the crisis. The analysis will be based on process-tracing through an analysis of policy documents related to the negotiations and newspaper reporting of the negotiations. The conclusions will not only contribute to our understanding of post-crisis developments, but will also offer important insights into the legitimacy of the governance of the global financial system at a time that seems under increasing public scrutiny (e.g. the Occupy movement).
