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International Financial Architecture: What's New? What's Missing? / Edition 1
     

International Financial Architecture: What's New? What's Missing? / Edition 1

by Peter B. Kenen
 

ISBN-10: 0881322970

ISBN-13: 9780881322972

Pub. Date: 09/15/2001

Publisher: Peterson Institute for International Economic

Shortly after the Mexican crisis of 1994-95, the major industrial countries undertook to strengthen the international financial architecture. They sought to reduce the risk of future crises by increasing the availability of information about economic conditions in emerging-market countries and strengthening the financial systems of those countries. They sought

Overview

Shortly after the Mexican crisis of 1994-95, the major industrial countries undertook to strengthen the international financial architecture. They sought to reduce the risk of future crises by increasing the availability of information about economic conditions in emerging-market countries and strengthening the financial systems of those countries. They sought better ways to manage future crises, including ways to involve private-sector creditors in crisis management.

In this book, Peter B. Kenen reviews the reform effort and assesses the results. He shows how the effort was influenced by the Asian, Russian, and Brazilian crises. He compares the results of the effort with the more radical recommendations of outside experts and of the Meltzer Report, and examines the implications of the reform effort for the role of the International Monetary Fund (IMF). Kenen finds that there have been useful innovations but calls for bolder efforts aimed at five objectives: (1) increasing the usefulness of IMF surveillance by focusing it sharply on the sustainability of national policies, exchange rates, and debt profiles; (2) narrowing the scope of IMF conditionality by ceasing to treat acute crises as opportunities to achieve fundamental reforms; (3) providing incentives to foster financial reform in emerging-market countries and, in the interim, encouraging them to limit short-term foreign borrowing by their banks and corporations; (4) using the IMF's resources more effectively by making less money available but disbursing it more rapidly; and (5) enlisting the private sector in crisis management by introducing roll-over clauses into short-term debt contracts and collective-action clauses into long-term debt contracts.

Product Details

ISBN-13:
9780881322972
Publisher:
Peterson Institute for International Economic
Publication date:
09/15/2001
Series:
Policy Analysis in International Economics Series
Edition description:
New Edition
Pages:
150
Product dimensions:
6.00(w) x 8.94(h) x 0.41(d)
Age Range:
18 Years

Related Subjects

Table of Contents

Prefaceix
Acknowledgmentsxi
Acronymsxiii
1 Introduction1
The Origins of the Architecture Exercise1
The Rey Report and Private-Sector Involvement5
The Asian Crisis and the Architecture Exercise6
What Lies Ahead11
2 Causes and Consequences of the Recent Crises13
The Capital Inflow Problem14
The Mexican Crisis of 1994-9519
The Asian Crisis of 1997-9826
Contagion, Exchange Rates, and Output Effects35
What Happened Thereafter43
3 Myths and Metaphors49
Culpability, Confidence, and Conditionality51
Can the IMF Function as an LLR?57
Metaphor and Mischief in the Meltzer Report63
Can Floating Fix It?71
4 The Architecture Exercise: What's New?87
The Evolution of the Architecture Exercise88
Halifax and Lyon88
Denver and Birmingham93
Köln and Okinawa101
Achieving the Objectives of the Architecture Exercise105
Detecting Vulnerability105
Strengthening the Infrastructure in Emerging-Market
Countries109
Limiting Reliance on IMF Financing111
Applying the Köln Framework117
5 The Architecture Exercise: What's Missing?125
Promoting Compliance with Standards and Codes126
Interim Measures132
Short Notes on Other Shortcuts135
Rethinking Private-Sector Involvement138
Summing Up150
References157
Index173
Tables
Table 1.1 Official financing for Thailand, Indonesia, and
Korea8
Table 2.1 Private capital flows to developing countries,
1977-9514
Table 2.2 The balance of payments of Mexico, 1993-9620
Table 2.3 Change in real GDP of Indonesia, Korea,
Malaysia, and Thailand, 1996-9942
Figures
Figure 2.1 Mexican exchange rate, 1994-9721
Figure 2.2 Asian exchange rates, 1996-200030

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