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N°309 |
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| 28 March 2011 |
| Reform of the International Monetary System:
Some Concrete Steps |
Agnès Bénassy-Quéré
Jean Pisani-Ferry
Yu Yongding |
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| Reform of the international monetary system is under discussion after three decades of apathy. However,
in the short term, there is little chance of a grand redesign of the international monetary system.
Nevertheless, concrete steps should be taken. First, consensus is needed on exchange rates, capital flows
and reserves. This consensus is closer than often assumed, and should be codified in some form of soft
law, with provisions for surveillance agreed on. Second, financial safety nets must be improved so that
countries do not have to self-insure by accumulating reserves. The least difficult route could be a new
regime for deciding on Special Drawing Right allocations that would facilitate more frequent use of
this instrument. Third, a change in the composition of the SDR should be planned for, to strengthen the
multilateral framework by including the renminbi. These reforms would be a partial move, and would
prepare the ground for further developments. |
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