Financial stability needs global time

Pierre-Andre Cordey and Sergio Rossi

International Journal of Trade and Global Markets, 2010, vol. 3, issue 2, 217-229

Abstract: Bankruptcy of systemically-important financial institutions shows the importance of knowing the precise instant in time when termination of a major participant in cross-border payment and settlement systems occurs, in order to avoid instability in the whole financial system and its negative effects on the global economy. This paper elaborates on the importance of a 'global time' and proposes a new time measurement system. Adopting such a system improves the governance and supervision of an ever-increasing number of cross-country and cross-currency transactions, on both product and financial markets, thus contributing to make sure that systemic risks are less likely to occur.

Keywords: cross-country transactions; financial stability; global time measurement; international trade; bankruptcy; financial institutions; banking; banks; cross-border payments; cross-border settlements; economic instability; global economy; cross-currency transactions; governance; supervision; systemic risks; global markets. (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijtrgm:v:3:y:2010:i:2:p:217-229

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