Runs by prime-brokerage clients and derivatives counterparties were a central cause of the global financial crisis. These runs precipitated the failures of Bear Stearns and Lehman Brothers by substantially reducing the broker's liquidity. This Working Paper, the ninth in the Squam Lake series distributed by the Greenberg Center for Geoeconomic Studies, argues for higher regulatory liquidity requirements for dealer banks that use assets of clients and counterparties as a source of liquidity.

Violations of the Nuclear Nonproliferation Treaty by Iran and North Korea threaten to undermine the legitimacy of the nonproliferation regime. Paul Lettow proposes a comprehensive agenda for improvements, including tougher sanctions against transgressors, a criteria-based system to limit the spread of enrichment and processing technologies, and expansion of International Atomic Energy Agency authority.

Since 2008, Russia, like many other countries, has experienced a deep economic crisis. The question is how this crisis might affect Russia's domestic politics and foreign policy and, consequently, whether any change is warranted in U.S. policy toward Moscow. Jeffrey Mankoff argues that Russia's need to focus on repairing its economy during this global crisis gives the West an opportunity to deepen its economic engagement with Russia, which could bind Moscow more firmly to the liberal global economic order and encourage reform in both Russia and neighboring states.

Most discussions about using international institutions to address climate change focus narrowly on the work of the United Nations Framework Convention on Climate Change. However, many other international institutions also have a significant role to play in mitigating and adapting to the effects of climate change. This paper examines the existing climate-related efforts and capabilities, as well as the future potential, of a variety of international institutions, including those that deal with environment, energy, and economics. While there are still major shortfalls, the paper argues that there is significant existing institutional capacity to draw from in addressing climate change.

This International Institutions and Global Governance program Working Paper offers suggestions to strengthen the nuclear security regime and achieve the four-year goal set by President Obama to secure all vulnerable nuclear materials around the world.

Sudan faces the prospect of renewed violence between north and south over the next twelve to eighteen months. Overwhelmingly in favor of independence, the south will either secede peacefully through a credible referendum process as agreed to in the 2005 Comprehensive Peace Agreement (CPA) or pursue this by force if the CPA should collapse. This Center for Preventive Action Contingency Planning Memorandum presents the likely triggers of renewed civil war and discusses the U.S. policy options for preventing it from happening and mitigating its consequences in the event that it does.

Failed states provide fertile ground for terrorism, drug trafficking, and a host of other ills that threaten to spill beyond their borders. Somalia is thus a problem not just for Somalis but for the United States and the world. Bronwyn E. Bruton takes on one of today's most vexing foreign policy challenges, offering concise analysis and thoughtful recommendations grounded in a realistic assessment of U.S. and international interests and capabilities in Somalia.

Many people argue that inappropriate compensation policies in financial companies contributed to the global financial crisis. Some say the overall level of pay was too high. Others criticize the structure of pay, claiming that contracts for CEOs, traders, and other professionals induced them to pursue excessively risky and short-term strategies. This Working Paper, the eighth in the Squam Lake Working Group series distributed by the Center for Geoeconomic Studies, argues that governments should generally not regulate the level of executive compensation at financial firms. Instead, a fraction of compensation should be held back for several years to reduce employees' incentives to take excessive risk.

NATO has been a cornerstone of security in Europe--and of U.S. foreign policy--for six decades. But its ability to continue playing such a central role is unclear. James M. Goldgeier takes a sober look at what the alliance and its members must do to maintain NATO's relevance in the face of today's strategic environment.

India faces the real prospect of another major terrorist attack by Pakistan-based terrorist organizations in the near future, an event that would jeopardize important U.S. security interests in South Asia. This Center for Preventive Action Contingency Planning Memorandum examines the factors that would condition India's response; the consequences of Indian military retaliation and Pakistani counterretaliation for the United States; and Washington's policy options for preventing and containing the crisis.

Recent events in Darfur raise the familiar question of whether international law facilitates the kind of early, decisive, and coherent action needed to effectively combat genocide. Matthew C. Waxman argues that putting decisions about international intervention solely in the hands of the UN Security Council risks undermining the threat or use of intervention when it may be most potent in stopping mass atrocities.

Israel would regard any expansion of nuclear weapons capability within its region as an intolerable threat to its survival, and as such regards Iran's developing nuclear program with concern, in turn causing speculation that the Israeli government may choose to attack Iran's nuclear installations. This Center for Preventive Action Contingency Planning Memorandum assesses the likelihood of an Israeli strike on Iran, the policy options available to diminish that likelihood, the implications should it take place, and measures that can be taken to mitigate the consequences should it occur.

This Squam Lake Working Group Paper endorses legislation that would give authorities the necessary powers to effect an orderly resolution of large complex financial institutions. As part of this authority, every such institution should be required to create "living wills" that would help authorities address the difficulties that might arise in a resolution.

For more than a decade, the United States has mostly watched from the sidelines as Asian countries organize themselves into an alphabet soup of new multilateral groups. In this report, the authors review the relationship between pan-Asian and trans-Pacific institutions and suggest policy guidelines for a new U.S. approach to this new Asian landscape. A purposeful multilateralism that pools the efforts of those with the greatest capacity, the authors argue, could make Asia a more prosperous and secure region.

In this CGS/IIGG Working Paper, Jeffry A. Frieden reviews the historical record on the political fallout from the unraveling of macroeconomic imbalances. He warns that the coming adjustments may test the capacity of national governments and international institutions to maintain an open international economic order.

The United States can ill afford the burden of additional foreign policy challenges, making it imperative that the U.S. government find ways to identify, delay, and avert international crises that could harm U.S. interests or even lead to military engagement. In this report, the authors provide an actionable road map for how the U.S. government should revamp its existing U.S. prevention architecture to make it more effective in dealing with potential crises abroad.

In this Center for Geoeconomic Studies Working Paper, Steven Dunaway argues that the world economy faces the prospect of a prolonged period of slower growth. Other sources of demand need to be found to take up the slack left by slower U.S. growth. However, the prospects for this do not look good, as none of the other major economies appear inclined to make the necessary changes in policies to deal with their imbalances and raise their demand.

Nigeria's underdeveloped but oil-rich Niger Delta region currently is the site of a crippling insurgency. Fueled by a complex mixture of protest, crime, and political corruption, the network of armed groups that create this instability pose serious problems both for Abuja and for oil-importing countries across the globe. This Working Paper provides insights into these militias' origins, characteristics, and interactions with one another.

This Task Force report offers a strategy for maintaining America's political and economic leadership by attracting skilled immigrants, a program of legalization for those living in the United States illegally, and steps for securing the country's borders in an effective and humane way.

Egypt is now entering a period of political transition with the expectation that President Hosni Mubarak's almost twenty-eight-year tenure will shortly come to an end. This Center for Preventive Action Contingency Planning Memorandum assesses the possibility of a troubled leadership succession or an Islamist push for political power, the implications for the United States, and policy steps the U.S. government might take depending on what it determines as its broader policy objectives in Egypt.