Towards a New Global Financial Architecture

One underlying theme of this book has been that the Asian crisis holds more general lessons than simply pinpointing the specific problems of those Asian countries that were directly affected. In fact, this crisis showed how the twenty-first century may become a dangerously unstable epoch unless a new global financial architecture can be created in the near future. The task may seem enormous and hopeless. In a sense, this is rightly so. As long as we are trapped in a mode of thinking that sees the only choice as being between the status quo and the prohibitively expensive and politically impossible task of creating a whole new structure of international and domestic institutions and organizations, this will be so. We need to somehow break this impasse. In this chapter, I propose that we use a generally valid evolutionary principle which I have termed the ‘extended panda’s thumb’1 principle to reform the IMF and create some regional institutions to move forward.