L’Hotellerie-Fallois, Pilar Brueggemann, Axel Bussière, Matthieu Chiţu, Livia Estefanía, Julia Gallego, Sonsoles Garrido, Isabel Janssens, Caroline Keeney, Mary Lalanne, Florian Landbeck, Alexander Lerner, Christina Maurini, Claudia Mukhopadhyay, Mayukh Serra, Xavier Stevens, Luc Vasardani, Melina van der Ven, Menno Vonessen, Benjamin
Since the global financial crisis, the Global Financial Safety Net (GFSN), traditionally consisting mainly of countries' own foreign exchange reserves with the International Monetary Fund (IMF) acting as a backstop, has expanded significantly with the continued accumulation of reserves, the sharp increase of swap lines between central banks, and the further development and creation of new Regional Financing Arrangements (RFAs). RFAs have expanded, reaching an aggregate size comparable to that of the IMF and becoming an integral layer of the safety net. Enhancing the cooperation between the IMF and RFAs so that they play complementary roles in case of global distress, becomes critical in order to further strengthen the multi-layered GFSN, while paying attention to issues such as moral hazard, stigma or exit strategies in connection with IMF-RFA cooperation. This paper presents recent experience and lessons learned in IMF-RFA cooperation and proposes how to improve their future interaction.
Global Financial Safety Net Regional Financing Arrangements International Monetary Fund moral hazard stigma exit strategies