Not only are the interrelationships between trade, monetary and financial regulatory issues at the forefront of a long-standing academic debate, but they are also at the centre of ongoing discussions in the international negotiating fora. The subjects of discussion include the issues surrounding the debate over appropriate regulatory frameworks in financial services and transactions at the World Trade Organization (WTO). Furthermore, the disruptive effects of financial instability and crises on trade, and the trade-distorting effects of currency misalignments, are obvious grounds for a closer investigation of the issues of coherence between international regulation of trade and finance.

This project will consider the trade-and-finance nexus from the viewpoint of exchange rate regimes and current account management. Against the background of the asserted link between financial liberalisation and the frequent occurrence of currency, banking and financial crises that pose a severe challenge to the capacity of emerging market economies to macro-manage their internal and external accounts, the project aims to analyse the appropriateness of exchange rate regimes in forestalling or dealing with crisis situations. The project will thus furnish the analytical and empirical insights on the issues of coherence between international regulation of trade and finance, with particular focus on emerging markets.