The last year marked an important step for the legal and policy literature on monetary and financial law. Within a short period of time two important monographs on the quest for global financial stability were published. Both of them address timely and important aspects of international financial and monetary policy that will be at the centre of international legal scholarship for the next few years. The two books have the merit of venturing for the first time into the complex labyrinth of financial and monetary regulation, and of unveiling how contemporary international economic law responds to the peculiar needs and challenges of global finance.

Chris Brummer's book is the logical completion of his academic journey on the role of soft law in the regulation of finance. Brummer is now probably amongst the most important experts on soft law and a rising star in international financial legal scholarship. His book addresses in a comprehensive fashion one particular feature of contemporary financial policy-making: the use of non-binding rules (in the form of financial standards, principles, guidelines, and informal recommendations) to regulate financial stability and to co-ordinate international co-operation on international financial matters. The book has the great merit of not being limited to a simple legal analysis of the role of soft law in the context of public international law, but rather to investigate the political economy foundations of financial rule-making. In doing so, Brummer explains to the reader in a clear and comprehensive way how the economic and political underpinnings of international finance shape the international regulatory framework on financial stability. He demonstrates how the political economy structure of international finance ultimately influences the ability or willingness of financial regulatory authorities to adopt soft norms to regulate international finance, and to respect them. The book draws on Brummer's previous work on the same topic, but it adds a new perspective influenced by recent regulatory reforms at the outset of the financial crisis.

The book is divided into six chapters, each of them examining particular issues of international soft law. The first chapter analyzes the relationship between the national scope of financial regulation and the international reach of financial markets. It discusses how national regulators use financial standards to enhance their regulatory power vis-à-vis other foreign regulators, and to increase the appeal of national financial markets to foreign investors. One fundamental conclusion of this chapter is that the size or growth of domestic capital markets has a direct correlation to the power that national financial regulators exert in the formulation of international financial standards. The second chapter introduces the reader to the realm of international financial law, and discusses the complex institutional architecture overseeing international financial stability. The chapter provides a blueprint for international financial rule-making, and it discusses the main features of the law-making process in international financial institutions. It also shows how the membership structure and the legal configuration in each organization ultimately have a determining influence on the regulatory process. The third and fourth chapters are probably the most important for the overall architecture of the book, and for the discussion on soft law. The third chapter analyzes the relationship between the non-binding character of soft norms, and the practice of obedience to financial standards by domestic regulators. It discusses the main legal and political theories on compliance, and it provides a new argument on the political power of international financial markets and institutions in ensuring compliance. According to Brummer, the political power of financial markets and institutions compels national authorities to respect international financial standards, and it ultimately replaces the soft character of the norm. The fourth chapter takes a step further and discusses the main arguments on the legitimacy of international financial standard setters as international law-makers, and the relationship between soft law and democracy. Commentators have often argued the lack of accountability of these institutions. However, Brummer challenges the mainstream view by demonstrating how the domestic democratic roots of the system ultimately act as a guarantee of the democratic legitimacy of the law-making process. The last two chapters provide an up-to-date analysis on the recent regulatory development following the financial crisis, and a view on future developments of financial law-making.

All in all, Brummer's book constitutes a fundamental research tool for all those lawyers or political scientists interested in exploring the roots of modern finance and in understanding the deep political economy foundations of the discipline. It is the perfect trait d'union between the legal, economic, and policy aspects of finance, and it will certainly represent a fundamental pillar in the legal and policy scholarship on international finance.

The second book is devoted to the other side of modern global financial stability, and it concerns the role of monetary policy in the increasingly complex framework of international economic law. Annamaria Viterbo takes the reader on a journey of discovery of monetary policy measures in the jurisprudence of international tribunals and of the practice of international trade and investment agreements. Unlike Brummer, Viterbo is less keen on the political economy implication of monetary policy. The fundamental goal of her book is rather to show how the increasingly complex regulatory oversight and the invasive attitude of international economic law (even more so given the proliferation of investment treaties) influence and undermine the traditional independence of monetary authorities in the conduct of monetary affairs. The ultimate assumption here is that international trade and investment treaties have progressively developed to regulate, directly or indirectly, important aspects of monetary policy-making, which until now were usually confined to domestic monetary sovereignty. The implicit conclusion of the book is that monetary authorities will have to take into account the scope of international trade and investment treaties when formulating their economic policies.

The book is divided into seven chapters, and is roughly distributed across two major areas. The first part deals with the macro-institutional structure of monetary policy and global financial stability, while the second part discusses specific monetary measures, such as capital and currency controls and exchange rate devaluation, and their compliance with existing international norms. The first chapter explores the theoretical foundations of monetary and financial stability as modern global public goods, and it sets the ground for the subsequent analysis of the global financial architecture. The second and third chapters introduce the reader to the institutional underpinnings of monetary and financial stability and describe the historical evolution of the monetary system from Bretton Woods to the Financial Stability Board. Viterbo describes the role of the GATT (and later of the WTO) in the protection of monetary stability, and the evolution of the two most important international financial institutions—the International Monetary Fund (IMF) and the World Bank—in the regulation of monetary policy. She then describes the contemporary global financial architecture, explaining the role of the IMF, the Bank of International Settlements, and the Financial Stability Board, in the regulation of finance and in the monitoring of global financial stability. The second part of the book is definitely the more interesting one, and the more relevant from a scholarly perspective. Viterbo moves from the observation that certain monetary measures, such as currency and capital controls or exchange rate policies, have a fundamental role in shaping the contours of international economic policy, and are also an essential policy tool for the maintenance of monetary stability. In the following chapters she then analyzes how the tripartite architecture of international economic law—IMF, WTO, and investment law—regulates monetary measures. Viterbo devotes a chapter to each legal regime. In each chapter she describes the applicable regulatory framework to monetary measures and analyzes in the light of the relevant jurisprudence the constraints posed by international law on monetary policy. The last chapter of the book is devoted to the analysis of a hot topic at the intersection between trade and monetary policy: exchange rate manipulation. Drawing on a considerable body of literature on the subject, Viterbo describes the role of exchange rate manipulation in international trade and monetary policy, and how IMF law disciplines it. She then comments and analyzes how, in spite of explicit provisions in WTO Agreements, exchange rate manipulation might nevertheless fall into the ambit of WTO law.

Viterbo's book has the merit of unveiling for the first time a timely issue of international economic law and policy, the rising conflict between the need of states to maintain and control their monetary stability, and the parallel need of traders and investors to be protected in their legal rights. The analysis of the applicable legal framework and the relevant jurisprudence will provide a useful guide for lawyers and economists who are venturing for the first time into this difficult field.