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Toward A New Global Financial Architecture: Some Issues and Approaches

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The current debate on new Global Financial Architecture is, in a way, the continuation of the debate that was intensified consequent upon the Asian crisis.

The Financial Stability Forum (FSF) which has been recently transformed into Financial Stability Board (FSB) and the G-20 which has gained higher profile in the context of the global financial crisis were products of the Asian crisis. The questions relating to governance, credibility and the effectiveness of several multi-lateral institutions such as IMF and BIS were discussed soon after the Asian crisis. At one stage a few years ago, it appeared that IMF was irrelevant, though some steps were taken to increase quotas of some EME’s. Similarly G 20 was almost losing its relevance. The recent global financial crisis warranted urgent responses which meant activating and empowering the G-20 and IMF, and later expanding FSF into FSB. There is an agreement to expedite the reform of IMF while resources at its disposal have been enhanced.