Ebook Money, Politics, and a Three approaches to regulatory frameworks for Future for the International financial systems
Flexible financial markets appear to stimulate growth (Levine, Loayza and Beck, 1998). They help allocate existing resources to their most efficient uses. Most importantly they help fund competing experiments and innovations and ultimately select the most successful among them. World-wide there is now a trend towards deregulation and liberalisation of financial markets. However, deregulated financial markets can exhibit severe volatility and disrupt economic activity as exemplified by the recent emerging market crises originating in East Asia, partly as a result of herd behaviour and panic. Some of the policy innovations of the 20 th century have been aimed at creating safety nets against systemic failure in financial systems such as deposit insurance and liquidity support.
However, the safety nets themselves also unavoidably create incentives for excessive risk-taking (moral hazard). The key challenge for financial system management is thus to combine deregulation and safety nets against systemic failure with effective prudential regulation and oversight of actors in financial systems. Possible approaches depend in turn on the choice of monetary and exchange rate regime, in which financial systems are embedded. For example, fixed exchange rate systems such as currency boards limit the ability of the monetary authority to provide deposit insurance or liquidity support.
CONTENTS
INTRODUCTION
PART A:FINANCIAL SYSTEM ARCHITECTURE - THE DILEMMA OF THE ECONOMIC CONSTITUTION
I. Financial system architecture - an economic constitution
II. Changes in monetary and financial ystems during the 20th century
III. Outcomes and issues
IV. In search of (re-) solutions
Mainstream solution - market-oriented, independent regulation
Alternative solution - return to controls
Alternative solution - market discipline without safety nets
PART B: A STORY OF THE FUTURE: NATIONS STATES, E&MONEY AND
CIJRRENCY CHOICE
I. Failure of mainstream reform
II. Importing credibility
III. Exporting financial transactions
IV. Nation states as a system of liability limitation
V. The optimal currency zone issue
VI. Money Unbundled
VII. Conclusion
BIBLIOGRAPHY
Download
Ebook Money, Politics And A Future For The International Financial System
Posted in :
