Regional and Global Monetary Cooperation
Lamberte, Mario; Morgan, Peter J. | February 2012
Abstract
The increasing occurrence of national, regional, and global financial crises, together with their
rising costs and complexity, have increased calls for greater regional and global monetary
cooperation. This is particularly necessary in light of volatile capital flow movements that can
quickly transmit crisis developments in individual countries to other countries around the world.
Global financial safety nets (GFSNs) are one important area for monetary cooperation. This
paper reviews the current situation of regional and global monetary cooperation, focusing on
financial safety nets, with a view toward developing recommendations for more effective
cooperation, especially between the International Monetary Fund (IMF) and regional financial
arrangements (RFAs).
A GFSN should have adequate resources to deal with multiple crises, should be capable of
rapid and flexible response, and should not be encumbered by historical impediments such as
the IMF stigma that would limit its acceptance by recipient countries. Oversight of a GFSN
needs to be based on cooperation between global and regional forums, for example, the G20
and ASEAN+3 or East Asia Summit (EAS). Such a GFSN should include the IMF and RFAs at a
minimum, and it is highly recommended to find ways to include central banks as providers of
swap lines and multilateral banks as well. The basic principles governing the cooperation of IMF
and RFAs include rigorous and even-handed surveillance; respect of independence and
decision-making processes of each institution and regional specificities; ongoing collaboration
as a way to build regional capacity for crisis prevention; open sharing of information and joint
missions where necessary; specialization based on comparative advantage; consistency of
lending conditions and conditionality, although with flexibility; respect of the IMF as preferred
creditor; subsidiarity; avoidance of moral hazard; and transparency.
Citation
Lamberte, Mario; Morgan, Peter J.. 2012. Regional and Global Monetary Cooperation. © Asian Development Bank Institute. http://hdl.handle.net/11540/2273. License: CC BY-NC-ND 3.0 IGO.Keywords
Economic Development
Economic Infrastructure
Economic Policies
Regional Economic Development
Microfinance Programs
Public Finance
Local Financing
Financial Stability
Financial Sector Regulation
Enterprises
Financial aid
Economies in transition
Local Finance
Local Government
Insurance Companies
Banks
Social Equity
Social responsibility of business
Accounting
Personal budgets
Cost and standard of living
Bank accounts
Credit control
Regulatory reform
Banks and banking
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