IDEAS home Printed from https://ideas.repec.org/p/iie/wpaper/wp11-5.html
   My bibliography  Save this paper

Integrating Reform of Financial Regulation with Reform of the International Monetary System

Author

Listed:
  • Morris Goldstein

    (Peterson Institute for International Economics)

Abstract

This paper links reform of the international financial regulatory system with reform of the international monetary system because as this recent global crisis demonstrates so vividly, the root causes can come from both the financial and monetary spheres and they can interact in a variety of dangerous ways. On the financial regulatory side, I highlight three problems: developing a better tool kit for pricking asset-price bubbles before they get too large; shooting for national minima for regulatory bank capital that are at least twice as high as those recently agreed to as part of Basel III; and implementing a comprehensive approach to "too-big-to-fail" financial institutions that will rein-in their past excessive risktaking. On the international monetary side, I emphasize what needs to be done to discourage "beggar-thy-neighbor" exchange rate policies, including agreeing on a graduated set of penalties for countries that refuse persistently to honor their international obligations on exchange rate policy.

Suggested Citation

  • Morris Goldstein, 2011. "Integrating Reform of Financial Regulation with Reform of the International Monetary System," Working Paper Series WP11-5, Peterson Institute for International Economics.
    • Handle: RePEc:iie:wpaper:wp11-5
    as

    Download full text from publisher

    File URL: https://www.piie.com/publications/working-papers/integrating-reform-financial-regulation-reform-international-monetary
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Laeven, Luc & Levine, Ross, 2007. "Is there a diversification discount in financial conglomerates?," Journal of Financial Economics, Elsevier, vol. 85(2), pages 331-367, August.
    2. David Miles & Jing Yang & Gilberto Marcheggiano, 2013. "Optimal Bank Capital," Economic Journal, Royal Economic Society, vol. 123(567), pages 1-37, March.
    3. Alan Greenspan, 1996. "Opening remarks," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 1-5.
    4. International Monetary Fund, 2010. "Republic of Kazakhstan: 2010 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Kazakhstan," IMF Staff Country Reports 2010/241, International Monetary Fund.
    5. Berger, Allen N. & Herring, Richard J. & Szego, Giorgio P., 1995. "The role of capital in financial institutions," Journal of Banking & Finance, Elsevier, vol. 19(3-4), pages 393-430, June.
    6. International Monetary Fund, 2010. "Republic of Azerbaijan: 2010 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Azerbaijan," IMF Staff Country Reports 2010/113, International Monetary Fund.
    7. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 215-268, November.
    8. William R. Cline & John Williamson, 2010. "Estimates of Fundamental Equilibrium Exchange Rates, May 2010," Policy Briefs PB10-15, Peterson Institute for International Economics.
    9. Edwin M. Truman, 2009. "The International Monetary Fund and Regulatory Challenges," Working Paper Series WP09-16, Peterson Institute for International Economics.
    10. International Monetary Fund, 2010. "Tonga: 2010 Article IV Consultation: Staff Report, Staff Supplement, and Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2010/112, International Monetary Fund.
    11. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    12. Morris Goldstein, 2006. "Renminbi Controversies," Cato Journal, Cato Journal, Cato Institute, vol. 26(2), pages 251-266, Spring/Su.
    13. International Monetary Fund, 2010. "Fiji: 2009 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Fiji," IMF Staff Country Reports 2010/136, International Monetary Fund.
    14. International Monetary Fund, 2010. "Germany: 2010 Article IV Consultation-Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Germany," IMF Staff Country Reports 2010/085, International Monetary Fund.
    15. Nicolas Véron & Morris Goldstein, 2011. "Too big to fail- the transatlantic debate," Working Papers 495, Bruegel.
    16. International Monetary Fund, 2010. "Nepal: 2010 Article IV Consultation and Request for Disbursement Under the Rapid Credit Facility: Staff Report; Staff Supplements; Public Information Notice on the Executive Board Discussion; Press Re," IMF Staff Country Reports 2010/185, International Monetary Fund.
    17. International Monetary Fund, 2010. "People's Republic of China: 2010 Article IV Consultation-Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2010/238, International Monetary Fund.
    18. William R. Cline, 2010. "Renminbi Undervaluation, China's Surplus, and the US Trade Deficit," Policy Briefs PB10-20, Peterson Institute for International Economics.
    19. International Monetary Fund, 2010. "Kuwait: 2010 Article IV Consultation: Staff Report and Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2010/236, International Monetary Fund.
    20. Cardarelli, Roberto & Elekdag, Selim & Lall, Subir, 2011. "Financial stress and economic contractions," Journal of Financial Stability, Elsevier, vol. 7(2), pages 78-97, June.
    21. International Monetary Fund, 2010. "Indonesia: 2010 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Indonesia," IMF Staff Country Reports 2010/284, International Monetary Fund.
    22. International Monetary Fund, 2010. "Australia: 2010 Article IV Consultation: Staff Report; and Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2010/331, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pedro Bação & António Portugal Durate & Mariana Simões, 2013. "The International Monetary System in Flux: Overview and Prospects," GEMF Working Papers 2013-07, GEMF, Faculty of Economics, University of Coimbra.
    2. Joseph E. Gagnon, 2012. "Combating Widespread Currency Manipulation," Policy Briefs PB12-19, Peterson Institute for International Economics.
    3. Alford, Duncan, 2013. "International Financial Reforms: Capital Standards, Resolution Regimes and Supervisory Colleges, and their Effect on Emerging Markets," ADBI Working Papers 402, Asian Development Bank Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ping, Luo, 2011. "The Current State of the Financial Sector and the Regulatory Framework in Asian Economies—The Case of the People’s Republic of China," ADBI Working Papers 310, Asian Development Bank Institute.
    2. Guonan Ma & Ivan Roberts & Gerard Kelly, 2016. "A Rebalancing Chinese Economy: Challenges and International Implications," RBA Annual Conference Volume (Discontinued), in: Iris Day & John Simon (ed.),Structural Change in China: Implications for Australia and the World, Reserve Bank of Australia.
    3. Andrea Kendall-Taylor, 2012. "Purchasing Power: Oil, Elections and Regime Durability in Azerbaijan and Kazakhstan," Europe-Asia Studies, Taylor & Francis Journals, vol. 64(4), pages 737-760.
    4. Grossman, Richard, 2016. "Banking Crises," CEPR Discussion Papers 11268, C.E.P.R. Discussion Papers.
    5. Aikman, David & Haldane, Andrew & Hinterschweiger, Marc & Kapadia, Sujit, 2018. "Rethinking financial stability," Bank of England working papers 712, Bank of England.
    6. Maciej Krzak & Grzegorz Poniatowski & Katarzyna Wasik, 2014. "Measuring financial stress and economic sensitivity in CEE countries," CASE Network Reports 0117, CASE-Center for Social and Economic Research.
    7. Viral V. Acharya & Matthew Richardson, 2012. "Implications of the Dodd-Frank Act," Annual Review of Financial Economics, Annual Reviews, vol. 4(1), pages 1-38, October.
    8. Fredric Mishkin, 2011. "How Should Central Banks Respond to Asset-Price Bubbles? The 'Lean' versus 'Clean' Debate After the GFC," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 59-70, June.
    9. Chung‐Hua Shen & Hsing‐Hua Hsu, 2022. "The determinants of Asian banking crises—Application of the panel threshold logit model," International Review of Finance, International Review of Finance Ltd., vol. 22(1), pages 248-277, March.
    10. Casu, Barbara & Clare, Andrew & Saleh, Nashwa, 2011. "Towards a new model for early warning signals for systemic financial fragility and near crises: an application to OECD countries," MPRA Paper 37043, University Library of Munich, Germany.
    11. Barth, James R. & Miller, Stephen Matteo, 2018. "Benefits and costs of a higher bank “leverage ratio”," Journal of Financial Stability, Elsevier, vol. 38(C), pages 37-52.
    12. Grodecka-Messi, Anna & Kenny, Seán & Ögren, Anders, 2021. "Predictors of bank distress: The 1907 crisis in Sweden," Explorations in Economic History, Elsevier, vol. 80(C).
    13. Kevin L. Kliesen & Michael T. Owyang & E. Katarina Vermann, 2012. "Disentangling diverse measures: a survey of financial stress indexes," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 369-398.
    14. Nicolas Véron & Morris Goldstein, 2011. "Too big to fail- the transatlantic debate," Working Papers 495, Bruegel.
    15. Sofiane Aboura & Emmanuel Lépinette-Denis, 2014. "An Alternative Model to Basel Regulation," Post-Print hal-01526063, HAL.
    16. António Afonso & Jaromír Baxa & Michal Slavík, 2018. "Fiscal developments and financial stress: a threshold VAR analysis," Empirical Economics, Springer, vol. 54(2), pages 395-423, March.
    17. Bank for International Settlements, 2012. "Operationalising the selection and application of macroprudential instruments," CGFS Papers, Bank for International Settlements, number 48, december.
    18. Charles A. E. Goodhart & Dimitrios P. Tsomocos, 2011. "The Role of Default in Macroeconomics," IMES Discussion Paper Series 11-E-23, Institute for Monetary and Economic Studies, Bank of Japan.
    19. Korinek, Anton & Kreamer, Jonathan, 2014. "The redistributive effects of financial deregulation," Journal of Monetary Economics, Elsevier, vol. 68(S), pages 55-67.
    20. Rainer Masera, 2010. "Reforming financial systems after the crisis: a comparison of EU and USA," PSL Quarterly Review, Economia civile, vol. 63(255), pages 299-362.

    More about this item

    Keywords

    financial regulation; IMF surveillance; too-big-to-fail; asset-price bubbles;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • G01 - Financial Economics - - General - - - Financial Crises
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iie:wpaper:wp11-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peterson Institute webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/iieeeus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.