Reforming the (Non)System

• Main Author: Ocampo, José Antonio
• Format: Book Part
• Language: English
• Published: Oxford University PressOxford 2017
• Subjects: North Atlantic
• Online Access: http://dx.doi.org/10.1093/oso/9780198718116.003.0007; https://academic.oup.com/book/9072/chapter/155620541

Abstract This chapter proposes a comprehensive yet evolutionary reform of the global monetary non-system that evolved out of the breakdown of the original Bretton Woods arrangement in the early 1970s. The recent North Atlantic financial crisis showed how dysfunctional the current international monetary and financial architecture is for managing today’s global economy, and led to calls to reform it. Proposals for reform in this chapter include: (i) a global reserve system that mixes the multi-currency arrangement with an active use of the International Monetary Fund’s Special Drawing Rights; (ii) stronger mechanisms of macroeconomic policy cooperation, including management of the exchange rate system and capital account regulations; (iii) additional automatic balance-of-payments financing facilities, and the complementary use of swap and regional arrangements; (iv) a multilateral sovereign debt workout mechanism; and (v) major reforms of the system’s governance.