Institutional reform

How should institutions be reformed to improve global economic governance?

Commentaries

  • Can the G20 reform the international economic system?

    Charles Wyplosz, 27 January 2009

    The creation of the G20 reflects the bad instincts of politicians. A rushed decision to pretend that “we are in command”, with no ex ante substance, poor preparation, and conflicting aims, can the G20 do some good when it meets in April in London? The odds are clearly dark, but miracles sometimes happen. Here are a few ideas. Dealing with the original sin There is something strange...

  • Reforms of the world financial system: Can the G20 deliver?

    Luigi Spaventa, 27 January 2009

    In these hard times, with banks collapsing by the week and the arteries of credit clogged in spite of government interventions of unprecedented size and nature, drafting blueprints of reform of the financial system may seem an unnecessary distraction from more pressing challenges. It is not so. Even agreeing on new rules (let alone implementing them) takes time, and, as an old saying goes,...

  • IMF reform: An unfinished agenda

    Edwin M. Truman, 27 January 2009

    The central question for the leaders of the G20 countries in the run-up to their second meeting on April 2 in London is whether to reopen the meagre package of IMF reforms that was agreed a year ago. Their answer should be bold. They should reopen the prior package and commit to completing the unfinished business of IMF reform. IMF’s promise damaged by narrow national interests The world...

  • Reforming the IMF

    John Williamson, 14 February 2009

    It is widely recognized that many of the small economies of the world do not possess the resources to expand demand in order to limit their contraction of output in the face of the adverse gales now blowing. Over sixty years ago the world created an institution (the IMF) intended inter alia to help them act against cyclical downturns. Today most countries do not wish to use it except as a last...

  • Global financial governance proposals: An opinionated stocktaking

    Biagio Bossone, 18 February 2009

    As the G20’s April summit approaches, the debate on reform options needs to focus on the key issues that will be before the national leaders. At the invitation of Vox’s editors, I use this column to take stock of the proposals contributed so far to Vox’s Global Crisis Debate on how to reform international institutions to strengthen global financial governance. I hope not to do...

  • A proposal to the members of the G20

    Biagio Bossone, 13 March 2009

    The increasingly painful international crisis demands that our world leaders rethink the very foundations of global economic governance. This is no longer the time for incrementally upgrading the international economic and financial “architecture”, but one of those historical junctures where true leadership should emerge and make possible a major overhaul of the existing architecture...

  • Institutional reform: Good for both the short and long run

    John Williamson, 24 March 2009

    It is important to remember that institutional reform is only one of several topics that will be discussed and resolved (we hope) by the leaders of the G20 countries when they meet in London on April 2. The core of the present crisis concerns the banking system, but G20 leaders will be constrained because most of them have given primary responsibility in this area to independent central banks...

  • The fallacy of Financial Regulation—neglect of the Shadow Banking System

    Michael Pomerleano The World Bank, 31 May 2011

      The message of this article is straightforward. In response to the crisis, the reforms in financial regulation address threats to the banking system by increasing capital and providing for liquidity in the banking system. This article argues that the measures miss the point of the recent crisis. The liquidity crisis in the shadow banking system was a major source of financial and economic...

  • The SDR solution

    Michael Pomerleano The World Bank, 5 May 2011

      There is universal agreement that the international monetary system (IMS) needs reform. All of us understand the benefits of avoiding the Triffin Dilemma by reforming the international financial system. The present system, dominated by reserves holdings of US dollars, places an unsustainable burden of creating reserves on the US. While the US enjoys the "exorbitant privilege" of...

  • The European restructuring should not be “too” easy *

    Michael Pomerleano The World Bank, 20 December 2010

      A chorus of respected analysts is voicing pessimism about the future of the euro and the European Union. Dani Rodrik writes about Thinking the Unthinkable in Europe. Barry Eichengreen comments on Europe’s Inevitable Haircut. Daniel Gros, in Big bang or endless crisis? argues for a big-bang solution to the eurozone’s problems. Ken Rogoff in The Euro at Mid-Crisis outlines an...

  • Are central banks up to the stability task? *

    Michael Pomerleano The World Bank, 20 December 2010

      In response to the financial crisis, the most immediate fundamental reform adopted by several developed countries is to have a “systemic regulator” overseeing the stability of the financial system as a whole. Through data gathering, analysis and ultimately regulation, the systemic regulator is expected is expected to mitigate the risks associated with highly inter-dependent...

  • Did really the Basel Committee ignore the markets completely? 100%?

    Per Kurowski The Voice and Noise Foundation and Petropolitan A.C., 14 October 2010

    Since 1997 I have been speaking out against the regulatory paradigm of capital requirements for banks based on ex-ante perceived risks applied by the Basel Committee and I have never really been able to figure out what went on in the minds of the regulators to come up with such an idea that though sounding so logical, more-risk-more-capital less-risk-less-capital, is so utterly faulty and...

  • Wholesale Banking Compensation and Systemic Risk

    9 February 2009

    The unprecedented public bailout of the major U.S. financial firms has forced the executive compensation issue into the open. The cat's out of the bag, and it won't go away anytime soon. Having been forced to guarantee every liability in sight and take equity stakes in most of the largest financial firms, taxpayers feel politically empowered to have a say in what happens next, notably pay. A...

  • What the G20 Can and Cannot Do

    Nicolas Veron Bruegel, 12 March 2009

    The London Summit on 2 April will be the second held at heads-of-state-and-government level by the G20. The previous session on 15 November in Washington DC was just a warm-up. The G20 countries must now face up to a wholly different crisis. Woe has spread far beyond the financial sector. It presently involves a serious recession, a collapse in global trade, a sharp rise in unemployment, and the...

  • Reforming the IMF: Will the G20 Miss a Chance?

    14 March 2009

    From Graham Bird and Dane Rowlands.     As the meeting of the G 20 on 2nd April in London gets closer, negotiations are proceeding behind the scenes about reforming the International Monetary Fund. Political leaders, and as host of the meeting Gordon Brown in particular, want to have something to show for their deliberations and their endeavours to ‘save the world’ from...

  • Asian Regionalism: How does it compare with Europe?

    12 April 2009

    On 2 April 2009, six Asian leaders attended the London meeting of the Group of Twenty (G20). They were actually seven, if one agrees to consider Australia as part of Asia. The Association of Southeast Asian Nations (ASEAN) Chair was part of the group. This was the first occasion for ASEAN to receive proper international recognition in such a high profile global forum (Table 1). Was Asia...

  • A compliance auditor - a new paradigm for transparency of risk management and compliance

    17 April 2009

    Information is essential for the regulation and efficient operation of financial markets and the current crisis requires a new paradigm to provide information to the market, the regulators and to all investors that addresses the failures that have contributed to the current crisis. The innovation proposed is a compliance audit undertaken by a 'compliance auditor'. The role of compliance auditor...

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