Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101243
Authors: 
Lamberte, Mario
Morgan, Peter J.
Year of Publication: 
2012
Series/Report no.: 
ADBI Working Paper Series 346
Abstract: 
The increasing occurrence of national, regional, and global financial crises, together with their rising costs and complexity, have increased calls for greater regional and global monetary cooperation. This is particularly necessary in light of volatile capital flow movements that can quickly transmit crisis developments in individual countries to other countries around the world. Global financial safety nets (GFSNs) are one important area for monetary cooperation. This paper reviews the current situation of regional and global monetary cooperation, focusing on financial safety nets, with a view toward developing recommendations for more effective cooperation, especially between the International Monetary Fund (IMF) and regional financial arrangements (RFAs). A GFSN should have adequate resources to deal with multiple crises, should be capable of rapid and flexible response, and should not be encumbered by historical impediments such as the IMF stigma that would limit its acceptance by recipient countries. Oversight of a GFSN needs to be based on cooperation between global and regional forums, for example, the G20 and ASEAN+3 or East Asia Summit (EAS). Such a GFSN should include the IMF and RFAs at a minimum, and it is highly recommended to find ways to include central banks as providers of swap lines and multilateral banks as well. The basic principles governing the cooperation of IMF and RFAs include rigorous and even-handed surveillance; respect of independence and decision-making processes of each institution and regional specificities; ongoing collaboration as a way to build regional capacity for crisis prevention; open sharing of information and joint missions where necessary; specialization based on comparative advantage; consistency of lending conditions and conditionality, although with flexibility; respect of the IMF as preferred creditor; subsidiarity; avoidance of moral hazard; and transparency.
Subjects: 
monetary cooperation
regional monetary cooperation
global monetary cooperation
regional financial arrangements
financial safety nets
global financial crises
JEL: 
F33
F34
F36
F53
F55
Document Type: 
Working Paper

Files in This Item:
File
Size
193.67 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.