Trans-National Network in International Finance Regulation

by Adi Rahmannur Ibnu

Trans-National Network (TRN) is a cooperation among countries concurred in achieving certain objective. This type of configuration is seemingly effective since the current and past experience in financial crises spreading around the globe is glued not only to a larger system than a domestic financial industry and regulation but also regulatory approach cross nations and its jurisdiction.

Trans-National Network (TRN) in international finance regulation sometimes poses underrated role. This inter-states cooperation has been received minor focus by government agencies after the difficulties converging each jurisdiction interests. Proven, some countries seem to firmly and stubbornly evading its implementation. The clean and clear example was the USA decision no to follow the capital adequacy requirements set in the Basel III documents. Japan followed this decision as well. Additionally, each country theoretically will put its domestic risks in a such unidentified manner which potentially weaken the international finance agreement such as Basel III. 

International finance regulation faces dilemma in choosing the appropriate mode of enforcement in one hand and convergence issue on the other hand. These choices are positioned here and there on a spectrum between extremely firm enforcement and soft-voluntary enforcement. To put it more pessimistically, financial crisis has severely reduced global confidence on the current financial regulation but formulating the newer and more robust one need more than coordination and investigation through TRN. This article tries to argue that TRN should not only function as a media to enforce the current regulation, indeed, TRN should orient the member countries to new horizon of cooperation and transparency.

to be continue