When our break-out group met, we started by individually putting down three kind of issues on colour-coded cards. We used green ones for putting down advantages and opportunities, red ones for risks and dangers, and yellow ones for questions that need further research. Moreover, we separately dealt with the short term dimension and the long term dimension of Governor Zhou’s proposal, respectively. When everyone had finished, we displayed the cards on two black boards, one for the short term, and one for the long term, and started a discussion. For your convenience, here you can find the documentation of what we gathered on the black board.

The number of yellow cards was biggest, followed by the green ones, with the red ones being in smallest number. The discussion was even more pronounced as we mostly discussed the questions that need further research. It was a lively and complex discussion. For this post, I do not aim at delivering a comprehensive overview of our discussion. Instead, I just want to highlight some of the issues that I found most remarkable:

1. Their was wide agreement that current account imbalances and the relation of the financial system to the real economy are important issues.
2. The issue was raised that it is not clear what caused the financial crisis. If one starts from this presumption, it is not clear whether Governor Zhou’s proposal could be a remedy for the financial crisis.
3. If we found a mechanism other than using a supra-national reserve currency for keeping current account imbalances in check, there would be no need for large currency reserves. It is neither clear whether in such a situation there is a need for a supra-national reserve currency at all, nor whether the fact that a supra-national reserve currency would not be that important would make it much easier to establish it.
4. If it is worthwhile to establish a supra-national reserve currency, it is not clear whether it is a good idea to link it to commodities.
5. Today, there is the principle: one goal, one instrument. One thing is whether this principle is a good idea in itself. This notwithstanding, the group discussed whether it is a good idea to invent a complex instrument for simultaneously addressing several goals.
6. Eventually, I asked the group members the following question: When Governor Zhou’s talks about the long term, how many years do you think we speak about? The response to my questions was: Four group members answered 10 years,  two answered 20 years, another two answered 50 years.