Bruegel paper on the reform of the global financial architecture
19 October 2010
The paper examines the implications of the global financial crisis of 2007-10 for reform of the global financial architecture and identifies institutional and substantive reforms by organisations such as the IMF and Financial Stability Board.
The publication was prepared for a conference sponsored by Bruegel and the Peterson Institute for International Economics (8 October 2010), as part of a project sponsored by the European Commission.
The paper is organised as follows: The next section examines the pre-crisis framework for safeguarding global financial stability and identifies six key areas where financial system reforms are necessary. The following section focuses on the IMF and the FSB (the successor to the Financial Stability Forum [FSF]) and their recent and prospective reforms.
The penultimate section discusses the interaction of the issues identified in the second section with the institutions discussed in the second-to-last section. The last section provides key conclusions and recommendations.
In summary, the paper concludes that the IMF and FSB are distinct and not fully comparable institutions, but they must cooperate more closely than in the past on the reform and performance of the global financial system. No other global financial architecture is up to the task and is politically feasible at this time. To that end, the paper outlines the key tasks that the IMF and FSB should address.
© Bruegel
