Description
Financial subordination examines and theorizes the persistent and structural asymmetries developing and emerging economies face in the global financial and monetary architecture. At the same time, critical legal scholars have been emphasizing the fundamental, if not foundational, role of the law in institutionalizing spatially uneven economic relations and imperial exploitation. However, to this date, the literature on financial subordination has only implicitly engaged with its legal dimension. Against this background, the paper examines key international financial standards: Basel III capital requirements, transparency criteria in the International Financial Reporting Standards and anti-money laundering and counter-terrorist financing guidelines of the Financial Action Task Force. Drawing on doctrinal research methods, document analysis and expert interviews, the analysis identifies three main mechanisms through which these standards entrench financial subordination: (i) economic isolation, (ii) the inefficient and cost-intensive allocation of financial resources and (iii) context-insensitive financial requirements. Findings also show that some state and non-state actors in developing and emerging economies benefit from existing standards at the expense of countries’ overarching development prospects. Finally, the paper concludes by reflecting on the potential of empirical and methodological research at the intersection of critical legal thought and financial subordination.