International Reform of the SDR and Domestic Monetary Policy

I would like to inform the group of the work of Jane D’Arista who is particularly experienced at finanical institutional design

Abstract:

This first paper argues that the link between excess liquidity, the buildup in debt, the asset bubbles that debt created and the financial crisis that followed are outcomes of monetary as well as regulatory policy failures; that they reflect a substantial weakening in the Fed’s ability toimplement countercyclical initiatives. It argues that the effectiveness of monetary policy can – and must – be restored and proposes a new system of reserve management that assesses reserves against assets rather than deposits and applies reserve requirements to all segments of the financial sector.

http://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1159&context=peri_workingpapers

A second area of her research is on international monetary reform with SDRs backed by development bonds. Jane has numerous papers on the problems the key currency reserve system, I attach just one article that critiques the Washington Consensus, and discusses the alternatives proposed along with her and others.

Abstract:

Concern about unsustainable payments imbalances in the global economy has prompted renewed interest in international monetary reform. This paper describes and evaluates six reform proposals that focus on strengthening the institutional framework for the current system. Some of these proposals ad- vocate increased surveillance; others would create new instruments or facilities; still others propose an evolutionary path toward a new, nonnational reserve or transactions currency. But none of the proposals confront the problems posed by the changes that resulted from the privatization of the international monetary system after the collapse of the gold/dollar exchange standard. The paper argues that a new institutional structure is needed to promote stability and balance by rebuilding a channel for balance-of-payments settlements managed by authori- ties that represent public rather than private interests.

http://ideas.repec.org/a/mes/postke/v30y2008i4p523-540.html

 

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