No. 238 dated 16 May 2012
The Evolving Multi-layered Global Financial Safety Net : Role of Asia
By Pradumna B. Rana
This paper argues that in the aftermath of the global economic crisis, the relatively centralized international monetary architecture set up at the Bretton Woods conference is evolving towards a more decentralized multi-layered global financial safety net (GFSN) comprising (i) the G20 at the apex as an overarching institution (ii) multilateral financial safety nets (MFSNs) established under the auspices of the 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 the increased incidence of capital account crisis subsequent to the deepening of financial globalization. The paper argues that the evolving GFSN has increased the flexibility of the international monetary architecture and enhanced the voice (weight and influence) of emerging markets on global economic governance to some extent. However, more needs to be done. Also there is the need for institutional and other reforms to prevent and manage a systemic crisis in the future and to protect innocent bystanders. What is the role of Asia and what can Asia do?
Keywords: international economic institutions, global economic governance, international monetary architecture, global financial safety net, Bretton Woods, Group of Twenty.
Click on the following link to download the working paper
http://www.rsis.edu.sg/publications/workingpapers/wp238.pdf
Bio
Dr. Pradumna B. Rana is Associate Professor of International Political Economy (IPE) at the S. Rajaratnam School of International Studies (RSIS) of the Nanyang Technological University (NTU). He is also the Coordinator of the Master of Science in IPE programme and the Coordinator of Economic Multilateralism and Regionalism Studies at RSIS’s Centre for Multilateralism Studies. Previously, he was the Senior Director of the Asian Development Bank’s (ADB’s) Office of Regional Economic Integration which spearheaded the ADB’s support for Asian economic integration. Prior to that, he held various senior positions at the ADB for many years. He has teaching and research experience at the NTU, NUS, and the Tribhuvan University (Nepal). He obtained his PhD from Vanderbilt University where he was a Fulbright Scholar and a Masters in Economics from Michigan State University and Tribhuvan University where he was a gold medalist. He has published widely in the areas of Asian economic development and integration, financial crises, and economic policy reforms in transition economies. These include 15 authored or edited books, over 25 chapters in books, and over 50 articles in international scholarly journals including Review of Economics and Statistics, Journal of International Economics, Journal of Development Economics, Journal of Asian Economics, World Development, Developing Economies, and Singapore Economic Review. Recently, he co-authored books on Asia and the Global Economic Crisis: Challenges in a Financially Integrated World (Palgrave Macmillan) and South Asia: Rising to the Challenge of Globalization (World Scientific Publishers). Most recently, he edited a book entitled The Renaissance of Asia: Evolving Economic Relations between South Asia and East Asia (World Scientific Publishers). He also co-edited books on Pan-Asian Integration: Linking East and South Asia (Palgrave Macmillan) and National Strategies for Regional Integration: South and East Asian Case Studies (Anthem Press, UK). He was the Guest Editor of the Singapore Economic Review Special Issue on Asian Economic Integration (Volume 55, Number 1, March 2010).
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