Resolution of Balance-of-Payments Crises

2017 ◽  
Author(s):  
José Antonio Ocampo
Keyword(s):  
Sovereign Debt ◽  
Developed Countries ◽  
Central Banks ◽  
Balance Of Payments ◽  
Financial Architecture ◽  
International Financial Architecture ◽  
Complementary Mechanism

This chapter analyses the history and effectiveness of the two major mechanisms of resolution of balance-of-payments crises: IMF emergency financing and complementary mechanisms, and sovereign debt workouts. It argues that IMF lending has historically met its counter-cyclical objectives and has been improving in recent decades in terms of providing adequate lending facilities as well as focusing conditionality on macro-relevant areas. Swap arrangements among central banks constitute the most important complementary mechanism, but benefit mainly developed countries. In contrast to advances in IMF financing, the need to have a better framework for debt resolution remains one of the major gaps of the international financial architecture. In this regard, this chapter proposes a multilateral mechanism that would lie between the voluntary and statutory solutions that have been proposed in the global debate. This mechanism would offer a sequence of voluntary negotiations, mediation, and eventual arbitration that would take place with pre-established deadlines.

scholarly journals FALÊNCIA SOBERANA: UMA HERESIA DESDE DENTRO

2003 ◽  
Vol 29 ◽  
Author(s):  
André Moreira Cunha
Keyword(s):  
Financial Crises ◽  
Sovereign Debt ◽  
First Generation ◽  
Debt Restructuring ◽  
New Approach ◽  
Financial Architecture ◽  
International Financial Architecture ◽  
De Se ◽  
New Policies ◽  
Intense Debate

A recorrência das crises financeiras, especialmente a partir da crise asiática de 1997-1998, determinou a emergência de um amplo debate e de um conjunto de ações políticas visando à reforma da arquitetura do sistema financeiro internacional. O presente artigo enfoca, dentro deste marco mais geral, a questão da “falência soberana”. A proposta lançada por Anne Krueger de se discutir a conformação de um arcabouço institucional capaz de ordenar os processos de reestruturação das dívidas de países “potencialmente” em crise sugere que as reformas de “primeira geração” já estão sendo consideradas insuficientes no núcleo duro do establishment oficial. Abstract The recurrence of financial crises, particularly after the Asian meltdown (1997-1998), determined the emergence of an intense debate and new policies concerning the international financial architecture. In this context, this paper discuss the recent Anne Krueger’s approach to sovereign debt restructuring. We suggest that this new approach reveals that the “first generation” reforms seem to be already insufficient, even for the hardcore of the official establishment.

Debt Maturity and the International Financial Architecture

2009 ◽  
Vol 99 (5) ◽  
pp. 2135-2148 ◽  
Author(s):  
Olivier Jeanne
Keyword(s):  
Sovereign Debt ◽  
External Debt ◽  
Welfare Analysis ◽  
Debt Maturity ◽  
Financial Architecture ◽  
International Lending ◽  
International Financial Architecture ◽  
Debt Crises

This paper presents a theory of the maturity of international sovereign debt, and derives its implications for the reform of the international financial architecture. The analysis is based on a model in which the need to roll over external debt disciplines the policies of debtor countries, but makes them vulnerable to unwarranted debt crises due to bad shocks. The paper presents a welfare analysis of several measures that have been discussed in recent debates, such as international lending-in-last-resort or the establishment of a mechanism for suspending payments on the external debt of crisis countries. (JEL F34, O19)

Liquidity Swaps between Central Banks, the IMF, and the Evolution of the International Financial Architecture

2019 ◽  
Author(s):  
Pauline Bourgeon ◽  
Jérôme Sgard
Keyword(s):  
New York ◽  
Large Scale ◽  
Central Banks ◽  
Lender Of Last Resort ◽  
International Crisis ◽  
Financial Architecture ◽  
International Financial Architecture ◽  
The Us ◽  
The Rich ◽  
The Imf

The 9/11 terrorist attacks in New York, then the 2008 crisis and the euro crisis have seen a major monetary innovation in the form of large-scale exchanges of liquidity swaps between core central banks. For instance, the US Federal Reserve and the European Central Bank exchanged for a few days or weeks equivalent amounts of their respective currencies, so that the ECB could lend dollars to eurozone commercial banks, and vice versa. At maturity, the swaps were either extended over time or reimbursed. This utterly simple operation thus allows central banks to act collectively as a Fed-led, network-based international lender of last resort. A significant corollary is that the action of the IMF, which used to be the main international crisis manager, now extends only to the developing countries and the (smaller) emerging countries. Conditionality, with its strongly asymmetric dimension, is limited to this latter group, while unconditional swaps are now the key liquidity channel for supporting the rich and powerful countries.

scholarly journals The Global South Debt Revolution That Wasn’t

2021 ◽  
pp. 232-256
Author(s):  
Quentin Deforge ◽  
Benjamin Lemoine
Keyword(s):  
Developing Countries ◽  
Sovereign Debt ◽  
Financial Analysis ◽  
Division Of Labour ◽  
International Crises ◽  
Financial Architecture ◽  
International Financial Architecture ◽  
Fair Principles ◽  
Analysis System ◽  
Recent Project

In this article, we analyse how international crises and conflicts over sovereign debt have transformed the agenda of the United Nations Conference on Trade and Development (UNCTAD), the Geneva-based organization founded in 1964 and whose history is closely linked to the G77 group of developing countries. We show how UNCTAD’s projects for structural reform of the international financial architecture were contested and ultimately rejected in the 1970s. Such defeats were a blow to the transformative goals that UNCTAD had initially set to achieve. In the 1980s, UNCTAD gradually became a technical agency and its mandate restricted to providing expert assistance and support to developing countries during their negotiations with the Paris Club. Meanwhile, the mandate to produce expertise at the macro level (the so-called ‘upstream’ area), was effectively transferred to the IMF and World Bank. With the development of the Debt Management Financial Analysis System (DMFAS), UNCTAD went from promoting systemic change in international financial architecture to sponsoring the micro-management of domestic policies as remedy to over-indebtedness. But we also show that UNCTAD did not always restrict itself to doing such ‘downstream’ work, i.e., improving debt issuing capacities and technologies of developing countries. While UNCTAD’s recent project on fair principles of lending and borrowing principles conforms to what’s expected from the group of advanced countries, another project involving the creation of an international mechanism of sovereign debt restructuring functioned as a disturbance to this fragile downstream–upstream division of labour between international organizations.

Money creation, debt, and justice

2021 ◽  
pp. 1470594X2199973
Author(s):  
Peter Dietsch
Keyword(s):  
Commercial Banks ◽  
Central Banks ◽  
Private Bank ◽  
Access To Credit ◽  
Financial Architecture ◽  
Theories Of Justice ◽  
Money Creation ◽  
The Creation ◽  
Interbank Lending ◽  
Alternative Designs

Theories of justice rely on a variety of criteria to determine what social arrangements should be considered just. For most theories, the distribution of financial resources matters. However, they take the existence of money as a given and tend to ignore the way in which the creation of money impacts distributive justice. Those with access to collateral are favoured in the creation of credit or debt, which represents the main form of money today. Appealing to the idea that access to credit confers freedom, and that inequalities in this freedom are morally arbitrary, this article shows how the advantage to those with collateral plays out in different ways in today’s economy. The article identifies several forms of bias inherent in money creation, and its subsequent destruction: loans from commercial banks to individuals and corporations, interbank lending, lending from central banks to commercial banks, and selective bail-outs by central banks. These are not mere inequalities: they are unjust since alternative designs of the financial architecture exist that would significantly reduce them. The paper focuses on one possible reform with the potential to address several of the types of bias identified, namely the separation of money creation from private bank credit.

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