Working Paper

Revitalizing Global Economic and Financial Cooperation: Observations on the Global Financial Architecture

Download paper


Since the outbreak of the Asian financial crisis more than a decade ago, world leaders have been searching for ways to make the global financial system more resilient, less crisis-prone, and better able to play its essential role in supporting broadly-shared growth.

Their deliberations have touched a wide range of critical issues—not least, governance in the international financial institutions; the adequacy of financing for development; the best appropriate mix of financing and adjustment for solving balance of payments problems; and global currency arrangements.

Today I do not plan to comment in detail on these important issues. By now I think most of us are convinced of the need for the IMF and other global institutions to adapt their voting shares and governance structures to reflect the growing importance of emerging market countries in the global economy. What remains is for decision makers to get serious, and get on with the job. There has been a quantum jump in IMF resources, and discussions are underway on capital increases for the multilateral development banks. Recent economic literature includes many provocative suggestions regarding currency issues, the SDR, and the possibility of a new Bretton Woods conference. But I suspect that the degree to which the US dollar may be supplanted in the future by the SDR or by some other national currency, such as the euro or RMB, will ultimately depend on policy performance and market preferences.