Chey, Hyoung‐kyu. (2012) Theories of International Currencies and the Future of the World Monetary Order. International Studies Review, doi: 10.1111/j.1468‐2486.2012.01104.x The international standings of currencies form a principal characteristic of the international monetary order, shaping the world economic and political system by influencing the economic and political relationships among countries. This paper provides a systematic review of the literature on international currencies, encompassing both economics and political science, with the aim of providing useful groundwork to help develop a better analytical framework for the study of international currency standing. In particular, this paper discusses the international currency concept, the benefits and costs of issuing an international currency, and the determinants of international currency standing. It also assesses conflicting prospects for the future of the US dollar as the world’s key currency, addressing the likelihoods of further internationalization of the euro and the renminbi, the dollar’s main potential rivals. It in addition calls attention to certain political economy factors as salient issues for the future study of international currency standing.

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This paper analyzes the factors that have contributed to the development of the Chiang Mai Initiative, one of the prominent examples of recent East Asian financial cooperation, by comparing it with the failed 1997 proposal for an Asian Monetary Fund.

Why do countries that did not participate in the establishment of international standards converge on them in the absence of external coercion? The market-based perspective asserts that market forces enhance cross-national convergence on international standards. This paper challenges the market-based perspective, focusing on compliance with the 1988 Basel Capital Accord in South Korea and Taiwan. First, it argues that adoption of the Basel Capital Accord by these countries was mainly driven by their regulatory authorities' concern about the potential risk of foreign market closure to noncompliant banks. Second, it demonstrates that enforcement by the two countries' regulatory authorities was crucial in ensuring compliance. These findings suggest that national regulatory authorities are still key actors in voluntary convergence on international standards.