Integrating Reform of Financial Regulation with Reform of the International Monetary System
AbstractThis paper links reform of the international financial regulatory system with reform of the international monetary system because as this recent global crisis demonstrates so vividly, the root causes can come from both the financial and monetary spheres and they can interact in a variety of dangerous ways. On the financial regulatory side, I highlight three problems: developing a better tool kit for pricking asset-price bubbles before they get too large; shooting for national minima for regulatory bank capital that are at least twice as high as those recently agreed to as part of Basel III; and implementing a comprehensive approach to "too-big-to-fail" financial institutions that will rein-in their past excessive risktaking. On the international monetary side, I emphasize what needs to be done to discourage "beggar-thy-neighbor" exchange rate policies, including agreeing on a graduated set of penalties for countries that refuse persistently to honor their international obligations on exchange rate policy.
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Bibliographic InfoPaper provided by Peterson Institute for International Economics in its series Working Paper Series with number WP11-5.
Date of creation: Feb 2011
Date of revision:
financial regulation; IMF surveillance; too-big-to-fail; asset-price bubbles;
Find related papers by JEL classification:
- F3 - International Economics - - International Finance
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- G01 - Financial Economics - - General - - - Financial Crises
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-19 (All new papers)
- NEP-BAN-2011-02-19 (Banking)
- NEP-CBA-2011-02-19 (Central Banking)
- NEP-CIS-2011-02-19 (Confederation of Independent States)
- NEP-MON-2011-02-19 (Monetary Economics)
- NEP-REG-2011-02-19 (Regulation)
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