 Global Financial ArchitectureMargin: The Journal of Applied Economic Research, 2010, vol. 4, issue 2, 225-239 Abstract: In the context of the formation of G-20, the paper points out the absence of reform in the Global Financial Architecture (GFA) after the East Asian crisis, and assesses factors that can improve the chances of real reform this time. A factual assessment of various causes advanced for the global crisis, puts the main responsibility on lax regulation. Liquidity created by current account imbalances was tiny compared to endogenous amplification of liquidity in the financial sector. Emerging markets needed reserves as self-insurance in the face of volatile cross border flows. Even so global imbalances increase risk. The paper summarises the Chimerica debate and the blocks that have stalled progress in resolving the issue. It argues that symmetric and balanced reform, at individual country and international level, is required to remove the blocks. Deeper governance reforms will make it feasible. Potential contributions of the G-20 are outlined. It is argued that India is a useful example of flexible but managed exchange rates that allowed market deepening and export growth. Keywords: Global Financial Architecture; Crisis; G-20; Imbalances; Oversaving; JEL classifications: F02; JEL classifications: F32; JEL classifications: F33 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:4:y:2010:i:2:p:225-239 DOI: 10.1177/097380101000400205 Access Statistics for this article More articles in Margin: The Journal of Applied Economic Research from National Council of Applied Economic Research |
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