Chapter

An Evaluation of Proposals to Reform the International Financial Architecture

Edited by Morris Goldstein

in Managing Currency Crises in Emerging Markets

Published by University of Chicago Press

Published in print February 2003 | ISBN: 9780226155401
Published online February 2013 | e-ISBN: 9780226155425 | DOI: http://dx.doi.org/10.7208/chicago/9780226155425.003.0015
An Evaluation of Proposals to Reform the International Financial Architecture

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This chapter evaluates several proposals for the reform of the international financial architecture using the lending policies and practices of the International Monetary Fund (IMF) as an organizing device for discussing selected issues in the reform debate. These include proposals to increase the interest rate or reduce the maturity of IMF loans, to restrict the size of IMF rescue packages and to replace ex post macroeconomic policy conditionality of the IMF. The analysis reveals that proposals for addressing currency mismatching problems appear to be either too costly or too drastic. This chapter suggests a combination of managed floating and active development of hedging mechanisms.

Keywords: international financial architecture; financial reform; IMF; interest rate; policy conditionality; currency mismatching; hedging

Chapter.  22640 words.  Illustrated.

Subjects: International Economics

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