The Future of Offshore Dollar Creation: Four Scenarios for the International Monetary System by 2040

Murau, Steffen; Rini, Joe; Haas, Armin

doi:10.2139/ssrn.3191786

Cited by 3 publications

(2 citation statements)

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“…During the COVID-19 pandemic, Murau, Rini, & Haas (2020) explore the following four scenarios for the global financial system in 2040: a continuation of the current US dollar hegemony; the co-existence of competing monetary blocks; the emergence of an international monetary federation; or international monetary anarchy.…”

Section: Literature Reviewmentioning

confidence: 99%

The Challenges of Reforming the International Monetary System in the Post COVID-19 World

Cristina

Ramona

2020

Studies in Business and Economics

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The paper analyzes if the international monetary system calls for reform and whether China and the renminbi will play a decisive role in the post COVID-19 world. It also evaluates the main scenarios and trends that is being discussed since the global crisis – selecting the relevant authors, journals, institutions and opinions – examines present conditions and tries to extrapolate into future trends. Opting for a nontechnical approach, the article could be a good insight into the international monetary system, for academics, non-experts and policy makers. The paper concludes that if the 2008 crisis has induced the growth of the China role in the international monetary governance and the increase of the renminbi internationalization, the COVID-19 pandemic and post crisis reconstruction could generate a deeper reform of the international monetary system, in which the Chinese currency will strengthen its global position alongside the US dollar and the euro.

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Section: Literature Reviewmentioning

confidence: 99%

The Challenges of Reforming the International Monetary System in the Post COVID-19 World

Cristina

Ramona

2020

Studies in Business and Economics

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“…This may provide the starting point for developing a better understanding of the systemic risks inherent in the IMS. Also seeMurau, Rini and Haas (2018) as well as Haas,Murau and Rini (2018).…”

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Offshore Dollar Creation and the Emergence of the Post-2008 International Monetary System

Murau

2018

SSRN Journal

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This paper studies the transformation of the International Monetary System (IMS) in the run up to and after the 2007-9 Financial Crisis. Adopting a Money View perspective, it argues that the IMS, in contrast to widespread skepticism, does have a system-like quality. This paper understands the IMS as a US-centered hierarchical payments system within which short-term debt instruments are issued as credit money by various public and private financial institutions, in particular central, commercial and shadow banks. With the Fed located at the apex of the IMS, credit money forms denominated in US dollars are located highest up in the hierarchy and trade at par with each other, whilst they typically have fluctuating exchange rates to credit money forms denominated in the units of account of other monetary jurisdictions. From this, the paper argues that the key component of today's IMS is the 'realm' of offshore US dollar creation, which is situated in between US dollar-denominated credit money issued in the US ('onshore dollars') and non-US dollar-denominated credit money issued outside the US. In this 'offshore dollar realm', non-US financial institutions are able to create international liquidity via US dollar-denominated private credit money outside the US. The paper systematically carves out the post-2008 setup of the offshore dollar realm with a focus on Eurodollar deposits, offshore money market fund shares, foreign exchange swaps and central bank swaps. With the institutional innovations materializing during the 2007-9 Financial Crisis, the IMS is now a publicprivate hybrid that fully mirrors the onshore US monetary system in the offshore dollar realm.

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Imperatives for Transformation of the International Monetary System in the Conditions of Multipolarity

Kuznetsov

2022

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The neoliberal model of globalization promoted the outstripping growth of financial assets over the development of the real sector. The functioning of the international monetary system (IMS), based on one key national currency — the US dollar, has led to the financialization of the world economy and the formation of global imbalances. The purpose of the article is to substantiate the need to replace US-centric financial institutions with new institutions at the regional level and to transform the IMS in the direction of monetary polycentrism and regionalization. The paper discusses the mutual responsibility of the core and periphery countries for the formation of global imbalances. The financial and economic indicators of sovereign states, transnational companies and transnational banks are compared according to the “scale” of globalization. The study shows chronic disproportions between the dynamics of global capital growth and economic growth rates, leading to the state’s loss of control over the reproduction process. It is substantiated that the current transformation of the IMS in the direction of monetary polycentrism and regionalization is a natural reaction to these imbalances. The article reveals a negative relationship between the implementation of procyclical and anti-crisis monetary policies by the central banks of developed countries and the competitive positions of developing countries in international financial and commodity markets. The factors of using the oligopoly of the Big Three credit rating agencies as a “soft power” to maintain the US global hegemony and the status of the US dollar as a key reserve currency are systematized. The author concludes that in order for developing countries to form their own international liquidity, it is necessary to stimulate the internationalization of their currencies by developing pan-Asian financial institutions and encouraging competition between them and the existing institutions of the IMS.

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The Future of Offshore Dollar Creation: Four Scenarios for the International Monetary System by 2040

Cited by 3 publications

References 10 publications

The Challenges of Reforming the International Monetary System in the Post COVID-19 World

The Challenges of Reforming the International Monetary System in the Post COVID-19 World

Offshore Dollar Creation and the Emergence of the Post-2008 International Monetary System

Imperatives for Transformation of the International Monetary System in the Conditions of Multipolarity

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