International Monetary Reform: A specific set of proposals

153 Pages·2016·2.569 MB·English

by  John Williamson

International Monetary Reform
This volumeisacontributiontothedebatesurroundinginternational monetary
reform. The author examines and analyses the workings of the International
Monetary Fund (IMF) and suggests how the international monetary system
could, primarily through changes to the IMF, be reshaped and reformed.
Chapters examine the Palais-Royal Report, explain how the IMF could be
granted unlimited bailout powers to confront a global crisis, propose an
exchange rate-based mechanism by which the international community could
disciplineexcessiveimbalances,examinealternativepossibilitiesforthesupply
offuturereserves,advocate‘enthronementoftheSpecialDrawingRight’,and
discuss the obstacles in the wayof such an ambitious reform agenda.
This book offers an important contribution to global economic debate for
economists,academics,graduatesandstudents,andanyonewithaninterestin
international economics.
John Williamson was, for the greater part of his career (1981–2012), a Senior
Fellow at the Peterson Institute for International Economics, USA. Before
that he was an academic at the Universities of York and Warwick in the
United Kingdom, and Pontifícia Universidade Católica do Rio de Janeiro,
Brazil, interrupted by spells at the UK Treasury (1968–70) and the Interna-
tional Monetary Fund (1972–74). He was also a Visiting Professor at the
London School of Economics and Political Science, UK, and Massachusetts
Institute of Technology and Princeton University, USA, and took leave of
absence from the Peterson Institute to serve as Chief Economist for South
Asia in the World Bank (1996–99). His publications have mostly concerned
international monetary economics, although he also achieved a certain
notoriety in 1989 for inventing the phrase ‘Washington Consensus’.
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International Monetary Reform
A specific set of proposals
John Williamson
International Monetary Reform
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A speci c set of proposals
John Williamson
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Firstpublished2016
byRoutledge
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©2016JohnWilliamsonforselectionandchaptersandRoutledgefor
Appendix
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EuropaCommissioningEditor:CathyHartley
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BritishLibraryCataloguinginPublicationData
AcataloguerecordforthisbookisavailablefromtheBritishLibrary
LibraryofCongressCataloginginPublicationData
Williamson,John,1937-author.
Internationalmonetaryreform:aspecificsetofproposals/John
Williamson.
pagescm.–(Europaeconomicperspectives)
Includesbibliographicalreferencesandindex.
1.Internationalfinance.2.Financialinstitutions.3.Monetarypolicy.I.
Title.
HG3881.W493242016
332.4'5–dc23
2015028475
ISBN:978-1-85743-805-5(hbk)
ISBN:978-1-31566-903-8(ebk)
TypesetinTimesNewRoman
byTaylor&FrancisBooks
Contents
List of illustrations vi
Abbreviations vii
Acknowledgement ix
1 Introduction 1
2 The context 6
3 The case for making the IMF the lenderof last resort 17
4 How to adjust 25
5 When to adjust 38
6 The question of reserves 49
7 A logical extension: SDRs as the only reserve asset 63
8 Negotiating the reforms 70
9 Legislating the reforms 78
10 The reformed system in action 89
11 Reform by US unilateralism? 98
12 Concluding remarks 103
Appendix 109
References 134
Index 137
List of illustrations
Figure
4.1 Illustration of the Meade Theorem 26
Tables
3.1 IMF criteria for FCL and PLL qualification 19
10.1 Reserve changes following May 2011 (SDR million) 90
A.1 Quotas (SDR million, June 2015) 127
A.2 Board of Executive Directors (June 2015) 132
Box
9.1 Article IV: Obligations Regarding Exchange Arrangements 84
Abbreviations
AFRITAC African Technical Assistance Center
AIIB Asian Infrastructure Investment Bank
AML anti-money-laundering
ASEAN Association of Southeast Asian Nations
BIS Bank for International Settlements
BRICS Brazil, Russia, India, China, South Africa
C-20 Committee of Twenty
CCI countervailing currency intervention
CGER Consultative Group on Exchange Rate Issues
CFT countering the financing of terrorism
CRU Composite Reserve Unit
EBA External Balance Assessment
ECB European Central Bank
ECF Extended Credit Facility
ECU European Currency Unit
EMS European Monetary System
ESR External Sector Report
EU European Union
FCL Flexible Credit Line
FDI foreign direct investment
FEER fundamental equilibrium exchange rate
FSAP Financial Sector Assessment Programme
FSSA Financial System Stability Assessment
G3 Group of Three
G4 Group of Four
G8 Group of Eight
G10 Group of 10
G20 Group of 20
GAB General Arrangements to Borrow
GAC Global Advisory Committee
GDDS General Data Dissemination System
GDP gross domestic product
HIPC heavily indebted poor country
viii Abbreviations
IDA International Development Association
IEO Independent Evaluation Office
IMF International Monetary Fund
IMFC International Monetary and Financial Committee
LDCs Least Developed Countries
m. million
MDRI Multilateral Debt Relief Initiative
NAB New Arrangements to Borrow
OFC offshore financial centre
PCDR Post-Catastrophe Debt Relief
PCL Precautionary Credit Line
PLL Precautionary and Liquidity Line
PRGF Poverty Reduction and Growth Facility
RoW rest of the world
S5 Systemic five
SCF Standby Credit Facility
SDDS Special Data Dissemination Standard
SDR(s) Special Drawing Right(s)
SIDS Small Island Developing States
SLF Short-Term Liquidity Facility
TTF Topical Trust Fund
UK United Kingdom
UN United Nations
US(A) United States (of America)
WTO World Trade Organization
Acknowledgement
Material in the Appendix is republished with permission from The Europa
World Year Book, available in print and online (www.europaworld.com),
published by Routledge.