I was late to the opening session of the International Economic Association Congress, so I got to hear only the last bit of Guillermo Calvo's presidential address. But I was in time to hear his bottom line which is that financial crises can hit you regardless of whether you are a saint or a sinner. His solution to the problems of financial globalization: a global lender of last resort and more global cooperation on financial regulation and supervision to prevent a "race to the bottom." But as he was the first to acknowledge, it is not at all clear how these ends can be achieved in a world where nation states guard their sovereignty on these matters zealously. Even the Eurozone has so far failed to harmonize national financial regulations.
The interesting question to me is how financial globalization can be tamed in the world that we do inhabit--not the world we wished we inhabited. And here we seem to have a real dearth of ideas.