This chapter provides an historical account of why the institutional setting of the BIS has been conducive to the emergence of soft law as a critical tool for managing the global financial system. Soft law developed almost naturally at the BIS as a result of the many technocratic issues it was called on to deal with throughout its long history – be it German reparation payments in the 1930s, the management of the Bretton Woods system of fixed exchange rates in the 1960s or growing financial stability concerns in the 1970s and 1980s and beyond. The Basel I Capital Accord, adopted in 1988, was a political and regulatory watershed in that respect – a non-binding code of conduct agreed by an informal committee of experts (the Basel Committee on Banking Supervision), that was subsequently implemented by national legislation in all the main constituencies. The chapter argues that the relative success of soft law in financial regulation owes a lot to the particular set-up and traditions of the BIS. However, it concludes that in order to be successful in future, soft law – much like the BIS – will have to become ever more inclusive and transparent.

It is a commonplace to state that we live in a time of continuous change. But that doesn’t make it any less true. The force and impact of change become all the more obvious when considering a horizon that spans two generations. Fifty years ago, a mere handful of advanced industrial economies dominated the global economy. Since then, a wide array of countries have emerged as new economic powerhouses. Economic development and prosperity are now more equally spread across the globe than at any other time over at least the past two centuries.

This chapter discusses the contribution of BIS research to the shift in the way financial stability issues have been looked at before and after the great financial crisis of 2007–9. It also considers the policy implications for the post-crisis reforms. The 1997–8 Asian crisis was an important turning point, focusing BIS research on the endogenous causes of financial instability and thus on the resilience and the risks of the financial system as a whole. From the late 1990s, the BIS started advocating a macroprudential approach to financial stability, including the adoption of countercyclical macroprudential policies. These ideas, while being shared by some academics and central banks, were largely ignored in policy circles, including in the Basel Committee on Banking Supervision. The chapter argues that the great financial crisis of 2007–9 catapulted these same ideas to the top of the reform agenda. Work done previously by the BIS and others, i.a. on the issue of countercyclical capital buffers, could be leveraged and find its way on the reform agenda pushed by the Financial Stability Board and the G20. The ‘measured contrarianism‘ of the BIS in this area thus added real value.

This chapter provides an historical account of why the institutional setting of the BIS has been conducive to the emergence of soft law as a critical tool for managing the global financial system. Soft law developed almost naturally at the BIS as a result of the many technocratic issues it was called on to deal with throughout its long history – be it German reparation payments in the 1930s, the management of the Bretton Woods system of fixed exchange rates in the 1960s or growing financial stability concerns in the 1970s and 1980s and beyond. The Basel I Capital Accord, adopted in 1988, was a political and regulatory watershed in that respect – a non-binding code of conduct agreed by an informal committee of experts (the Basel Committee on Banking Supervision), that was subsequently implemented by national legislation in all the main constituencies. The chapter argues that the relative success of soft law in financial regulation owes a lot to the particular set-up and traditions of the BIS. However, it concludes that in order to be successful in future, soft law – much like the BIS – will have to become ever more inclusive and transparent.

The raising of raw silk in the United States at the start of the nineteenth century was a local phenomenon that remained concentrated in areas that had a colonial legacy. In the context of a fast-diversifying economy and the meteoric rise of cotton occurring in the South, it gave little hint of being a branch of agriculture that had the potential to survive in the expanding United States. But sericulture experienced a nationwide rejuvenation between 1820 and 1845, as pockets of cultivation developed across the nation, from Maine to Louisiana. Most of these efforts raised small quantities which tended to be reeled locally and inexpertly, and twisted into sewing thread, though they could hold great value and meaning to individuals and households. The chapter argues that three mutually reinforcing vehicles gave particular shape to these antebellum efforts at silk production: the agricultural press, the postal service, and the agricultural society. These packaged up a nationalist rhetoric that virtuously reconciled agriculture with manufacturing, production with consumption, and progress with nostalgia. But in spite of innovative justifications and wide uptake, many of the self-same issues that had compromised earlier efforts at sericulture eventually rose to the surface. The challenge of making silk American had been accomplished, but not that of making American silk.

The sixteenth century would witness the remarkable rise of silk production in the Spanish Empire, as Iberian conquistadors and caterpillars converged upon Meso-American Indians and mountain forests. By the 1560s, amidst the brutal extraction of gold and silver, silk production had blossomed into one of the Americas’ first post-Columbian cash crops, and for a time it sustained a manufacturing industry that helped satiate the growing markets of a Latinising America. Perhaps strangely, this first colonial attempt at establishing silk cultivation across the Atlantic – rooting in Oaxaca – would prove unquestionably the most successful of all those in the Americas, linking the victims of the European Reconquista with those of the American Conquista: a Moorish speciality became a Mixtecan Indian opportunity. But it was a function of the dramatic pace of global interconnection in the sixteenth century that, within four decades of the first harvesting of American raw silk in the 1540s, the first Asian raw silk in bulk arrived from the other direction, across the Pacific. A commercial battle followed between the valuable fibrous proteins emitted by the silkworms of Granada (in Spain and New Spain), and those of their long-distant ancestors in China. Its result, the collapse of raw silk production in New Spain, was heavily influenced by the decline of Indian populations and the paranoia of the Spanish Crown in terms of protecting peninsular interests.

The prologue explains how silkworms became an object of fascination in early modern Europe, as their economic and physiological properties began to be more thoroughly understood in areas far distant from the regions in which silk raising (sericulture) originated. It outlines the book’s objective, which is to offer a deep and wide-ranging interrogation of raw silk’s failure as a commodity produced in the Atlantic world. By attending more to historical experimentation and failure, it argues that we can better understand what was distinctive about sericulture and what was particular about the Atlantic world complex: its vast distance, cultural hybridisation, colonial fragility, and manufacturing imbalances. The chapter tracks the global history of sericulture’s spread outward from Neolithic China, synthesising existing scholarship to identify certain prerequisites that accompanied its successful transplantation from one region to another, and variations in systems of production. These included availability of materials, the environmental capacity to accommodate the effective symbiosis of Bombyx mori (silkworms) and Morus (mulberry) trees on which they feed, an adequate seasonal labour pool, and migrant expertise to help establish production and instruct in more complicated processes. It closes by considering the particular opportunities and challenges presented by the Atlantic barrier and oceanic transmission.