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    The Evolving Multilayered Global Financial Safety Net: The Case of the Association of Southeast Asian Nations+3 Regional Financial Safety Net and the International Monetary Fund

    Rana, Pradumna B. | May 2017
    Abstract
    This paper argues that in the aftermath of the global economic crisis, the centralized international monetary architecture or the global financial safety net (GFSN) set up at the Bretton Woods conference is evolving towards a more decentralized multilayered safety net comprising (i) the G20 at the apex as an overarching institution, (ii) multilateral financial safety nets (MFSNs) established under the auspices of the International Monetary Fund (IMF), (iii) bilateral financial safety nets (BFSNs) among central banks, (iv) regional financial safety nets (RFSNs) established in various regions of the world, and (v) national financial safety nets (NFSNs) or reserve accumulation by individual countries. The most significant factor explaining this evolution is financial globalization and the increased incidence of capital account crisis. As in many other regions of the world, Asia has established the ASEAN+3 RFSN, comprising the Chiang Mai Initiative Multilateralization (CMIM) and ASEAN+3 Macroeconomic Research Office (AMRO), for crisis prevention and management. The ASEAN+3 RFSN seeks to complement the IMF. However, because of its ad hoc nature and the relatively small size and cumbersome disbursement procedures, it is unlikely that this facility will be utilized when the next financial crisis hits the region. Based on Europe’s experience with RFSN and IMF cooperation, the paper makes the case for a more structured form of cooperation between the ASEAN+3 RFSN and the IMF. Our proposal, together with the recent upgradation of AMRO to an international organization, could greatly enhance the effectiveness of the ASEAN+3 RFSN.
    Citation
    Rana, Pradumna B.. 2017. The Evolving Multilayered Global Financial Safety Net: The Case of the Association of Southeast Asian Nations+3 Regional Financial Safety Net and the International Monetary Fund. © Asian Development Bank Institute. http://hdl.handle.net/11540/7171.
    Keywords
    International Financial Market
    Multilateral Financial Institutions
    Economic Recession
    Market
    Crisis
    Economic indicators
    Growth models
    Gross domestic product
    Macroeconomics
    Economic forecast
    Financial Stability
    Financial Management System
    Financial Restructuring
    Capital Market Development
    Market Development
    Economics
    Erosion
    International Economics
    Macroeconomic
    Macroeconomic Analysis
    Performance Evaluation
    Impact Evaluation
    Foreign and Domestic Financing
    Business recessions
    Multilateral development banks
    Regulatory reform
    Capital
    Exports
    Economic development projects
    Economic policy
    Economic forecasting
    Show allCollapse
    Citable URI
    http://hdl.handle.net/11540/7171
    Metadata
    Show full item record
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    adbi-wp733.pdf (375.7Kb)
    Author
    Rana, Pradumna B.
    Theme
    Finance
    Economics

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    Copyright 2016-2020 Asian Development Bank Institute, except as explicitly marked otherwise