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Strengthening the Global Financial Safety Net

Taskforce on IMF Issues Irc
Authors registered in the RePEc Author Service: Matthieu Bussière (), Claudia Maurini and Julia Estefania ()

No 207, Occasional Paper Series from European Central Bank

Abstract: Since the global financial crisis, the Global Financial Safety Net (GFSN), traditionally consisting mainly of countries’ own foreign exchange reserves with the International Monetary Fund (IMF) acting as a backstop, has expanded significantly with the continued accumulation of reserves, the sharp increase of swap lines between central banks, and the further development and creation of new Regional Financing Arrangements (RFAs). RFAs have expanded, reaching an aggregate size comparable to that of the IMF and becoming an integral layer of the safety net. Enhancing the cooperation between the IMF and RFAs so that they play complementary roles in case of global distress, becomes critical in order to further strengthen the multi-layered GFSN, while paying attention to issues such as moral hazard, stigma or exit strategies in connection with IMF-RFA cooperation. This paper presents recent experience and lessons learned in IMF-RFA cooperation and proposes how to improve their future interaction. JEL Classification: F33, F34, F53, F55

Keywords: exit strategies; Global Financial Safety Net; International Monetary Fund; moral hazard; Regional Financing Arrangements; stigma (search for similar items in EconPapers)
Date: 2018-03
New Economics Papers: this item is included in nep-cba
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