, say, simpler – or does it reflect the greater difficulty of regulating across sovereign borders? it seems to me to be the latter, and we should address this deficiency. the need for “ rules of the game ” seems, if anything, to be greater in a globalised world than in a less integrated world. one of the defining characteristics of globalisation is the importance of scale, as technology drives the optimal business units larger and larger in a number of important areas. the other defining characteristic is “ winner takes all ”, and its related concept of “ first mover advantage ”. these characteristics combine together to produce areas where monopoly or quasi - monopoly will be important. the old response to monopoly – to break it up and force competition – will be precluded or restricted because of the inefficiencies that would result from this action. so the alternative channel will be to achieve a network of rules which addresses the issues raised by these imperfectly competitive firms. given the increasingly international nature of enterprise, what is needed to complement this development are international rules, not specific to any one country, but developed in a uniform way and acceptable to all. these would address issues such as monopoly, intellectual property rights, and legal issues. prudential supervision, capital flows, taxes and “ industry policy ” may also be suitable cases for treatment. in short, as closer relations impose greater need for uniformity ( e. g. in tax or investment regimes ), the need is to develop these in a collective international environment. tom friedman ( 1999 ) has called such rules the “ golden straitjacket ”, which captures two important characteristics of the process – the degree of uniformity which globalisation will impose ; and the generally beneficial nature of these rules. rules to govern global relationships will generally need to be on a uniform multinational basis, but this does not preclude the need for important regional input, in order to ensure the applicability of the universal rules to all countries. a good set of rules requires recognition of the great diversity of circumstances and institutions between countries. one specific example here is the rules on prudential supervision. it seems quite likely that the rules relevant to banks in this region would be somewhat it would be easy to exaggerate just how universal and all - encompassing the golden straitjacket may be. it does not seem true, for example, that tax rates will have to become uniform across countries. different ( reflecting the different degree of complexity and make - up of

2012 ), ‘ internationalization of the rmb and historical precedents ’, journal of 4 / 5 bis central bankers'speeches economic integration, 27 ( 3 ), pp www. hks. harvard. edu / fs / jfrankel / rmbintnztnjei2012pg329 ~ 365. pdf. 329 – 365, available at 3 these data can be found on the statistical tables page of the rba website ( table b20 ). 4 stevens g ( 2015 ), ‘ address to the boao forum for asia financial cooperation conference ’, audio address, reserve bank of australia, sydney, 30 july. chinese gross portfolio flows were equivalent to a little less than 1 per cent of gdp in 2015. 5 / 5 bis central bankers'speeches