Abstract not found

The recent phase of financial turmoil that started in Asia, crossed through Russia and reached Latin America generated a deep sense that fundamental reforms were required in the international financial architecture to prevent and improve the management of financial crises. The crisis led, indeed, to a recognition that there is an enormous discrepancy between the sophisticated and dynamic financial world and the institutions that regulate it, that “existing institutions are inadequate to deal with financial globalization ” 1 /. The crisis set in motion positive responses: a concerted expansionary effort led by the United States in the midst of the crisis, which was probably the crucial step that facilitated the fairly rapid though incomplete normalization of capital markets; the approval of new credit lines and the expansion of IMF resources; the recognition that incentives must be created to induce adequate debt profiles in developing countries, and that some capital account regulations may serve this purpose and provide a breathing space for corrective macroeconomic policies; the parallel recognition that financial liberalization in developing countries should be carefully managed and sequenced; a special impetus to international efforts to establish minimum standards of prudential regulation and supervision, as well as of information; the acceptance that

Campagna per la riforma della Banca Mondiale (CRBM)

I. The nature of the problems that the system faces...... 9 II. Some reflections on the political economy of the reform process ............................................................ 15 III. Financial crisis prevention and resolution ................ 19 IV. Development finance................................................... 25 V. Conditionality vs. "ownership" .................................. 29 VI. The role of regional institutions ................................. 33 VII. The realms of national autonomy............................... 37 VIII. Conclusions ................................................................. 41 Bibliography.......................................................................... 43 Issues published .................................................................. 47 Tables 1. Net long-term resource flows to developing countries, 1990-1998................................................................................... 11 2. Net flow of resources, 1992-1997 .............................................. 12 Figure 1. Use of IMF credit ....................................................................... 13 Abstract This paper argues that the agenda for international financial reform must be broadened in at least two senses. First of all, it should go beyond the issues of financial prevention and resolution, to those associated with development finance for poor and small countries, and to the "ownership" of economic and development policies by countries. Secondly, it should consider, in a systematic fashion, not only the role of world institutions but also of regional arrangements and the explicit definition of a...

currency transactions has the unique distinction of having attracted the ire of a power no less than the U.S. Congress. Introduced by Bob Dole and three other politicians, the "Prohibition on United Nations Taxation Act of 1996 " aimed at preventing UN officials and agencies from developing or promoting the Tobin tax or any other international taxation scheme under a different name. 2 Leaving aside the irony of a country with the greatest arrears in its dues to the UN, telling the international body what it should and should not do, what made the Tobin tax such an unwelcome proposal to the U.S. Congress was, as Raffer (1998) argues, its potential to bolster national autonomy and distribute the tax burden more equally around the globe. Both ran "counter to current tide of liberalization, globalization, and tax reductions for the well-off " (p. 530). Tobin's main reason for proposing his tax was of course more technical in nature. His main concern was to curb currency speculation, which he thought was responsible for the much greater frequency of exchange rate crises around the world since the trend of capital liberalization took hold. In much of the academic criticism on the Tobin tax, the debate concentrated on its feasibility and the "distorting " effects it would have as any tax does on private decisions. 3 Some also cautioned against its potential to detract attention from discussions of more far reaching solutions to the problem of international financial volatility (Taylor and Eatwell 2000, p. 93). But, few if any other than Davidson (1997, 1998) have questioned- on Keynesian grounds- that in theory such a transaction tax would dampen financial volatility and curb

1 “Getting the institutions right”: Corporate governance and technological capability in East Asia and Latin America compared Latin America and East Asia differ in the extent to which they have specialised in mechanical, electrical and electronic sectors. These sectors are critical for economic development but pose a challenge for corporate governance. By combining insights from studies of corporate governance and of development economics, this paper examines how certain developed countries have been able to establish institutions enabling a specialisation in these sectors. We show how East Asia has met some of the institutional conditions enabling specialisation in these sectors and the difficulties of Latin America in this respect.

* Rough draft, please do not quote Since the Mexican crisis in 1994, international financial markets are characterised by frequent turbulence. The most important international organisation in that field, the International Monetary Fund, has been unable to provide sufficient stability. The policies of the IMF have failed both in the field of crisis prevention and in the management of crises. However, the abolishment of the Fund or a substantial reduction of its mandate would not be useful. The more globalisation progresses, the greater the need for an IMF. This does not mean that the Fund will and should continue to exist in its current form. International financial markets have gained in importance, but they still lack many of the features that characterises the national financial sector. If globalisation shall be continued, we need those governance structures, e.g. a lender of last resort, at the international level. Markets need rules and regulations, and today these are often not existent at the international level. Therefore, the need for an IMF will even rise, but it will have to be a different one. Key words: Financial crises; financial markets; bailing-in of creditors; IMF reform Address for correspondence