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A good case for retirement at sixty? The World Bank and the International Monetary Fund enter their dotage.

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The world bank (WB) and the International Monetary Fund (IMF) were born sixty years ago in Bretton Woods. In their youth they presided over the post-war boom. In their late twenties they were buffeted by the collapse of the US$-based exchange rate system. In their mid-life crisis they abandoned state regulation in favor of 'structural adjustment', trying to marketise the world. Seeking a second childhood, the siblings embraced 'good governance', only to face widespread unpopularity. Now, in their advancing dotage, they are marginalised by unilateralism and, ironically, by financial marketisation. Against multiple efforts at breathing life into the institutions, a new 'people's governance' is forcing its way onto the agenda. Blaming and targeting financial institutions for global poverty, people's movements are creating alternatives to financialisation, charting pathways beyond the pensioned-off WB and IMF.

The current growth and scale of private international finance flows is astounding. Initially illegal, 'offshore' finance trading was mainstream by the 1970s. Financial flows are now fifty times larger than the value of world trade. Cross-currency speculative flows now account for 90 per cent of foreign exchange flows, with trade only accounting for 10 per cent (in 1970 the ratios were reversed). The world's ten largest banks control 90 per cent of the $100 trillion international derivatives market. With global GDP at about $40 trillion, a vast global finance casino is betting on our future.

The dramatic financialisation of resources has over-whelmed national regulatory systems. The key driver of financialisation is the imperative of escaping national regulation and exploiting national differences. The role of government in finance has given way to unaccountable forms of 'governance', where decisions are made behind closed doors, on the computer screens of traders, free from public scrutiny. Such decisions affects the livelihoods and survival of millions, but are increasingly conducted beyond the reach of national political authority.

The WB and IMF are likewise on the wane, sidelined by finance markets and by the exercise of US power. Until the 1970s, US financial power was clothed in the political legitimacy of the Bretton Woods system of international financial regulation. The WB and the IMF were presented as acting in the general interest, rather than...

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