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The international monetary system after the financial crisis


  • Dorrucci, Ettore
  • McKay, Julie


The main strength of today’s international monetary system – its flexibility and adaptability to the different needs of its users – can also become its weakness, as it may contribute to unsustainable growth models and imbalances. The global financial crisis has shown that the system cannot afford a benign neglect of the global public good of external stability, and that multilateral institutions and fora such as the IMF and the G20 need to take the initiative to set incentives for systemically important economies to address real and financial imbalances which impair stability. We draw this core conclusion from a systematic review of the literature on the current international monetary system, in particular its functioning and vulnerabilities prior to the global financial crisis. Drawing from this analysis, we assess the existing and potential avenues, driven partly by policy initiatives and partly by market forces, through which the system may be improved. JEL Classification: C21, C51, G15, G21, G28

Suggested Citation

  • Dorrucci, Ettore & McKay, Julie, 2011. "The international monetary system after the financial crisis," Occasional Paper Series 123, European Central Bank.
  • Handle: RePEc:ecb:ecbops:20110123

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    References listed on IDEAS

    1. Dimitre Milkov & Rafael A Portillo & Plamen K Iossifov & John Wakeman-Linn, 2009. "The International Financial Crisis and Global Recession; Impact on the CEMAC Region and Policy Considerations," IMF Staff Position Notes 2009/20, International Monetary Fund.
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    Cited by:

    1. Peter Spahn, 2016. "Population growth, saving, interest rates and stagnation," ROME Working Papers 201603, ROME Network.
    2. Agnes Benassy-Quere & Jean Pisani-Ferry, 2011. "What International Monetary System for a Fast-Changing World Economy?," Book Chapters,in: Jack T. Boorman & André Icard (ed.), Reform of the International Monetary System: The Palais Royal Initiative, chapter 21, pages 255-298 Emerging Markets Forum.
    3. Chiţu, Livia & Eichengreen, Barry & Mehl, Arnaud, 2014. "When did the dollar overtake sterling as the leading international currency? Evidence from the bond markets," Journal of Development Economics, Elsevier, vol. 111(C), pages 225-245.
    4. Pablo Moreno, 2013. "The Metamorphosis of the IMF (2009-2011)," Estudios Económicos, Banco de España;Estudios Económicos Homepage, number 78.
    5. repec:wsi:jicepx:v:03:y:2012:i:03:n:s1793993312500184 is not listed on IDEAS
    6. Claudio Borio & Piti Disyatat, 2011. "Global imbalances and the financial crisis: Link or no link?," BIS Working Papers 346, Bank for International Settlements.

    More about this item


    financial globalisation; global imbalances; international liquidity; international monetary system;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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