The International Monetary Fund and Regulatory Challenges

Truman, Edwin M.

doi:10.2139/ssrn.1521658

Cited by 2 publications

(3 citation statements)

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“…Branding an exchange rate "fundamentally misaligned" has proved to be no easier to implement for the Fund than identifying "manipulation," and in June 2009 the IMF management had to reverse course and withdraw not only the proposal to make increased use of ad hoc consultations but also the de facto application of the concept of fundamental misalignment itself (see IMF 2009a). 25 Truman (2010) concluded that the 2007 surveillance decision produced no tangible results affecting members' exchange rate policies; how a June 2009 staff guidance note (IMF, 2009a) could characterize the 2007 decision as "…a landmark for the Fund"-rather than a landmine-is beyond me. Michael Mussa (2008, p. 281 ), a former economic counselor at the Fund, has analyzed in considerable detail the Fund's exchange rate surveillance toward China's exchange rate policies.…”

Section: Reforming the Exchange Rate Systemmentioning

confidence: 99%

Integrating Reform of Financial Regulation with Reform of the International Monetary System

Goldstein

2011

SSRN Journal

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This paper links reform of the international financial regulatory system with reform of the international monetary system because as this recent global crisis demonstrates so vividly, the root causes can come from both the financial and monetary spheres and they can interact in variety of dangerous ways. On the financial regulatory side, I highlight three problems: developing a better tool kit for pricking asset-price bubbles before they get too large; shooting for national minima for regulatory bank capital that are at least twice as high those recently agreed as part of Basel III; and implementing a comprehensive approach to "too-big-to-fail" financial institutions that will rein-in their past excessive risktaking. On the international monetary side, I emphasize what needs to be done to discourage "beggar-thy-neighbor" exchange rate policies, including agreeing on a graduated set of penalties for countries that refuse persistently to honor their international obligations on exchange rate policy.

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Section: Reforming the Exchange Rate Systemmentioning

confidence: 99%

Integrating Reform of Financial Regulation with Reform of the International Monetary System

Goldstein

2011

SSRN Journal

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“…In the latest reform of the IMF’s surveillance system, the concept of external stability, namely implications of a country’s current and capital account balances for the global economy, was introduced into IMF surveillance. Critics point out that this emphasis on multilateral repercussions did not alter IMF surveillance from being bilateral between the IMF and a member country (Truman, 2009).…”

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confidence: 99%

“…18 18 On crucial issues, states have not been forthcoming with critical data. For instance, countries with 40 per cent of global foreign exchange reserves have declined to provide information to the IMF on the currency composition of their holdings (Truman, 2009). …”

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Conflicted Principals, Uncertain Agency: The International Monetary Fund and the Great Recession

Kaya

2011

Global Policy

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The G20’s renewal of faith in the International Monetary Fund (IMF) during the 2008 financial crisis appears to have reversed the IMF’s declining relevance evident in the years preceding the crisis. This article examines this putative revival of the IMF, arguing that the G20’s actions contained a paradox of delegation. On the one hand, the nature of the G20’s replenishment of the IMF’s resources during the crisis (mostly through credit lines available to the IMF) as well as the independence the major G20 economies can afford to have from the IMF (given that they are not beholden to its resources) has meant that the G20 countries faced low sovereignty costs in reviving the IMF. On the other hand, truly re‐establishing the IMF’s relevance would impose higher sovereignty costs, specifically in the form of strengthened IMF surveillance over G20 economies. This paradox of delegation suggests that the G20’s action toward the IMF does not inform properly whether the G20 states have contemplated the trade‐off between suffering sovereignty costs and achieving gains from delegation. In this regard, the proper role of the IMF in the governance of the global economy remains uncertain. Policy Implications The G20’s resuscitation of the IMF cannot be simply interpreted as indicating certainty regarding the future of the institution. In order for the IMF to fulfill its key tasks, particularly surveillance of global economic conditions, as envisioned by key members of the G20, these states need to permit the IMF to play the role of a mediator and technical expert in close coordination of their policies. The G20 states should resist the temptation to forum shop, namely charge other institutions with tasks similar to those of the IMF with a view to dispersing/avoiding sovereignty costs. It is no longer viable to hold on to prior assumptions and frameworks regarding the distribution of influence among states vis‐à‐vis the IMF – scholarly and policy works need to recognize large emerging economies as key principals of the Fund. At the same time, the IMF needs to enhance the evenhandedness of its analysis and advice in order to increase key member states’ perceptions of its effectiveness and fairness.

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The International Monetary Fund and Regulatory Challenges

Cited by 2 publications

References 15 publications

Integrating Reform of Financial Regulation with Reform of the International Monetary System

Integrating Reform of Financial Regulation with Reform of the International Monetary System

Conflicted Principals, Uncertain Agency: The International Monetary Fund and the Great Recession

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