Title: The Slow Progress of International Financial Reform
Abstract: The wave of currency and banking crises that began in 1997 in East Asia, then spread to Russia and other emerging markets, and even threatened to spill over to the United States, generated broad consensus that fundamental reforms were required in the international financial system. Particularly during 1997 and 1998, the view emerged that existing institutions andmechanisms, designed in the mid-1940s, were inadequate for preventing and managing crises in the twenty-first century. Significant reform – as well as strengthening – of global financial governance was seen as urgent. Besides the objective of achieving international financial stability, an equally important aim, to which insufficient attention has been given, is the provision of adequate capital flows, both private and public, to different categories of developing economies. Such flows can complement domestic savings and provide additional foreign exchange and technology to these economies. This does not imply a return to the excessive levels of easily reversible private lending that characterised the first half of the 1990s, but rather, sufficient levels of stable private and official flows that contribute to higher growth of both lowand middle-income countries. Thus, from a development perspective, the two major goals for a new international financial architecture are (i) to prevent currency and banking crises and better manage them when they do occur and (ii) to support the adequate provision of private and public investment flows to developing countries, including particularly to the lowest income countries. This chapter assesses progress on international financial reform in relation to these two goals (see also Griffith-Jones and Ocampo 2003). In this sense, this contribution is broader than most of the literature on the subject, which has focused on achieving international financial stability and avoiding contagion. It should be stressed that a development-oriented international financial architecture would benefit not only
Publication Year: 2005
Publication Date: 2005-12-29
Language: en
Type: book-chapter
Indexed In: ['crossref']
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Cited By Count: 2
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