IDEAS home Printed from https://ideas.repec.org/p/iie/wpaper/wp11-5.html
   My bibliography  Save this paper

Integrating Reform of Financial Regulation with Reform of the International Monetary System

Author

Listed:
  • Morris Goldstein

    (Peterson Institute for International Economics)

Abstract

This 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.

Suggested Citation

  • Morris Goldstein, 2011. "Integrating Reform of Financial Regulation with Reform of the International Monetary System," Working Paper Series WP11-5, Peterson Institute for International Economics.
    • Handle: RePEc:iie:wpaper:wp11-5
    as

    Download full text from publisher

    File URL: https://www.piie.com/publications/working-papers/integrating-reform-financial-regulation-reform-international-monetary
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alan Greenspan, 1996. "Opening remarks," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 1-5.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    3. Laeven, Luc & Levine, Ross, 2007. "Is there a diversification discount in financial conglomerates?," Journal of Financial Economics, Elsevier, vol. 85(2), pages 331-367, August.
    4. David Miles & Jing Yang & Gilberto Marcheggiano, 2013. "Optimal Bank Capital," Economic Journal, Royal Economic Society, vol. 123(567), pages 1-37, March.
    5. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
    6. International Monetary Fund, 2010. "Republic of Kazakhstan: 2010 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Kazakhstan," IMF Staff Country Reports 2010/241, International Monetary Fund.
    7. Berger, Allen N. & Herring, Richard J. & Szego, Giorgio P., 1995. "The role of capital in financial institutions," Journal of Banking & Finance, Elsevier, vol. 19(3-4), pages 393-430, June.
    8. International Monetary Fund, 2010. "Republic of Azerbaijan: 2010 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Azerbaijan," IMF Staff Country Reports 2010/113, International Monetary Fund.
    9. Nicolas Véron & Morris Goldstein, 2011. "Too big to fail- the transatlantic debate," Working Papers 495, Bruegel.
    10. William R. Cline & John Williamson, 2010. "Estimates of Fundamental Equilibrium Exchange Rates, May 2010," Policy Briefs PB10-15, Peterson Institute for International Economics.
    11. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 215-268, November.
    12. International Monetary Fund, 2010. "Nepal: 2010 Article IV Consultation and Request for Disbursement Under the Rapid Credit Facility: Staff Report; Staff Supplements; Public Information Notice on the Executive Board Discussion; Press Re," IMF Staff Country Reports 2010/185, International Monetary Fund.
    13. Edwin M. Truman, 2009. "The International Monetary Fund and Regulatory Challenges," Working Paper Series WP09-16, Peterson Institute for International Economics.
    14. International Monetary Fund, 2010. "Tonga: 2010 Article IV Consultation: Staff Report, Staff Supplement, and Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2010/112, International Monetary Fund.
    15. International Monetary Fund, 2010. "People's Republic of China: 2010 Article IV Consultation-Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2010/238, International Monetary Fund.
    16. Morris Goldstein, 2006. "Renminbi Controversies," Cato Journal, Cato Journal, Cato Institute, vol. 26(2), pages 251-266, Spring/Su.
    17. William R. Cline, 2010. "Renminbi Undervaluation, China's Surplus, and the US Trade Deficit," Policy Briefs PB10-20, Peterson Institute for International Economics.
    18. International Monetary Fund, 2010. "Fiji: 2009 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Fiji," IMF Staff Country Reports 2010/136, International Monetary Fund.
    19. International Monetary Fund, 2010. "Kuwait: 2010 Article IV Consultation: Staff Report and Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2010/236, International Monetary Fund.
    20. Cardarelli, Roberto & Elekdag, Selim & Lall, Subir, 2011. "Financial stress and economic contractions," Journal of Financial Stability, Elsevier, vol. 7(2), pages 78-97, June.
    21. International Monetary Fund, 2010. "Indonesia: 2010 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Indonesia," IMF Staff Country Reports 2010/284, International Monetary Fund.
    22. International Monetary Fund, 2010. "Australia: 2010 Article IV Consultation: Staff Report; and Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2010/331, International Monetary Fund.
    23. International Monetary Fund, 2010. "Germany: 2010 Article IV Consultation-Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Germany," IMF Staff Country Reports 2010/085, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pedro Bação & António Portugal Durate & Mariana Simões, 2013. "The International Monetary System in Flux: Overview and Prospects," GEMF Working Papers 2013-07, GEMF, Faculty of Economics, University of Coimbra.
    2. Joseph E. Gagnon, 2012. "Combating Widespread Currency Manipulation," Policy Briefs PB12-19, Peterson Institute for International Economics.
    3. Alford, Duncan, 2013. "International Financial Reforms: Capital Standards, Resolution Regimes and Supervisory Colleges, and their Effect on Emerging Markets," ADBI Working Papers 402, Asian Development Bank Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ping, Luo, 2011. "The Current State of the Financial Sector and the Regulatory Framework in Asian Economies—The Case of the People’s Republic of China," ADBI Working Papers 310, Asian Development Bank Institute.
    2. Guonan Ma & Ivan Roberts & Gerard Kelly, 2016. "A Rebalancing Chinese Economy: Challenges and International Implications," RBA Annual Conference Volume (Discontinued), in: Iris Day & John Simon (ed.),Structural Change in China: Implications for Australia and the World, Reserve Bank of Australia.
    3. Grossman, Richard, 2016. "Banking Crises," CEPR Discussion Papers 11268, C.E.P.R. Discussion Papers.
    4. Aikman, David & Haldane, Andrew & Hinterschweiger, Marc & Kapadia, Sujit, 2018. "Rethinking financial stability," Bank of England working papers 712, Bank of England.
    5. Andrea Kendall-Taylor, 2012. "Purchasing Power: Oil, Elections and Regime Durability in Azerbaijan and Kazakhstan," Europe-Asia Studies, Taylor & Francis Journals, vol. 64(4), pages 737-760.
    6. Viral V. Acharya & Matthew Richardson, 2012. "Implications of the Dodd-Frank Act," Annual Review of Financial Economics, Annual Reviews, vol. 4(1), pages 1-38, October.
    7. Fredric Mishkin, 2011. "How Should Central Banks Respond to Asset-Price Bubbles? The 'Lean' versus 'Clean' Debate After the GFC," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 59-70, June.
    8. Chung‐Hua Shen & Hsing‐Hua Hsu, 2022. "The determinants of Asian banking crises—Application of the panel threshold logit model," International Review of Finance, International Review of Finance Ltd., vol. 22(1), pages 248-277, March.
    9. de-Ramon, Sebastián & Iscenko, Zanna & Osborne, Matthew & Straughan, Michael & Andrews, Peter, 2012. "Measuring the impact of prudential policy on the macroeconomy: A practical application to Basel III and other responses to the financial crisis," MPRA Paper 69423, University Library of Munich, Germany.
    10. Marcus Miller & Lei Zhang, 2013. "The Invisible Hand And The Banking Trade: Seigniorage, Risk-Shifting, And More," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 56(3-4), pages 365-388.
    11. Tihana Skrinjaric, 2023. "Leading indicators of financial stress in Croatia: a regime switching approach," Public Sector Economics, Institute of Public Finance, vol. 47(2), pages 205-232.
    12. Baxa, Jaromír & Horváth, Roman & Vašíček, Bořek, 2013. "Time-varying monetary-policy rules and financial stress: Does financial instability matter for monetary policy?," Journal of Financial Stability, Elsevier, vol. 9(1), pages 117-138.
    13. Diana Zigraiova & Petr Jakubik, 2014. "Systemic Event Prediction by Early Warning System," Working Papers IES 2014/01, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jan 2014.
    14. Costas Milas, 2014. "Financial Stress and the Impact of Public Debt on UK Growth in High versus Low-Growth Regimes: 1850-2013," Working Paper series 13_14, Rimini Centre for Economic Analysis.
    15. Casu, Barbara & Clare, Andrew & Saleh, Nashwa, 2011. "Towards a new model for early warning signals for systemic financial fragility and near crises: an application to OECD countries," MPRA Paper 37043, University Library of Munich, Germany.
    16. Varotto, Simone, 2012. "Stress testing credit risk: The Great Depression scenario," Journal of Banking & Finance, Elsevier, vol. 36(12), pages 3133-3149.
    17. Barth, James R. & Miller, Stephen Matteo, 2018. "Benefits and costs of a higher bank “leverage ratio”," Journal of Financial Stability, Elsevier, vol. 38(C), pages 37-52.
    18. Grodecka-Messi, Anna & Kenny, Seán & Ögren, Anders, 2021. "Predictors of bank distress: The 1907 crisis in Sweden," Explorations in Economic History, Elsevier, vol. 80(C).
    19. Kevin L. Kliesen & Michael T. Owyang & E. Katarina Vermann, 2012. "Disentangling diverse measures: a survey of financial stress indexes," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 369-398.
    20. Nicolas Véron & Morris Goldstein, 2011. "Too big to fail- the transatlantic debate," Working Papers 495, Bruegel.

    More about this item

    Keywords

    financial regulation; IMF surveillance; too-big-to-fail; asset-price bubbles;
    All these keywords.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iie:wpaper:wp11-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peterson Institute webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/iieeeus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.