Financial crises have dogged the international monetary system over recent years. They have impoverished millions of people around the world, especially within developing countries. And they have called into question the very process of globalisation. Yet there remains no intellectual consensus on how best to avert such crises – much less resolve them. Policymakers stand at a crossroads.
This volume summarises and evaluates these issues, drawing on contributions by prominent international experts in the field. It considers whether the IMF may have actually fanned the flames of future crises through its lending decisions. It assesses the contribution made by private creditors in resolving past crises – and asks what mechanisms might best be used to involve private creditors in the future. It also assesses the merits of two recent competing blueprints for architectural reform – the so-called contractual and statutory approaches to crisis resolution.
These issues will shape the debate on the future of the international monetary system over the next decade and, probably, beyond. For although crises may always be with us, better public policy can surely help mitigate their future cost and incidence.
With an impressive array of internationally based contributors, this book will deserve a place on the bookshelves of economists and policy-makers in both the official and private sectors.
Table of Contents
Part 1: Introduction
1. Fixing financial crises in the twenty-first century (Andrew G. Haldane)
2. Breaking the crisis cycle in emerging market economies (Sir Edward A.J. Georgepart)
Part 2: Why involve the private sector?
3.Reflections on moral hazard and private sector involvement in the resolution of emerging market financial crises (Michael Mussa)
4. Comments on "Reflections on moral hazard and private sector involvement in the resolution of emerging market financial crises" (John Murray)
5. Private sector involvement in financial crisis resolution: definition, measurement and implementation (William R. Cline)
6. Comments on "Private sector involvement in financial crisis resolution" (Leonardo Leidermanpart)
Part 3: How to involve the private sector
7. Private sector involvement in crisis resolution and mechanisms for dealing with sovereign debt problems (Nouriel Roubini)
8. Comments on "Private sector involvement in crisis resolution and mechanisms for dealing with sovereign debt problems" (Amar Bhattacharya)
9. Binding-in the private sector (Andrew G. Haldane, Simon Hayes, Adrian Penalver, Victoria Saporta and Hyun Song Shin)
10. Comments on "Binding-in the private sector" (Robert Kahnpart)
Part 4: Contractual resolution of financial crises
11. Sovereign bonds and the collective will (Lee C. Buchheit and G. Mitu Gulati)
12. Comments on "Sovereign bonds and the collective will" (Nathan Sheets)
13. Sovereign bond restructuring: collective action clausesand official crisis intervention (Kenneth M. Kletzner)
14. Comments on "Sovereign bond restructuring" (Willem H. Buiter)
Part 5: Statutory resolution of financial crises
15. Standstills and an international bankruptcy court (Jonathan Eaton)
16. Comments on "Standstills and an internationalbankruptcy court" (Jeromin Zettelmeyer)
17. Co-ordination Failure, Moral Hazard and Sovereign Bankruptcy Procedures (Sayantan Ghosal and Marcus Miller)
18. Comments on "Co-ordination failure, moral hazardand sovereign bankruptcy procedures" (David Vinespart)
Part 6: The road ahead
19. Missing links in the international financial architecture (Mervyn A. King)
20 The work ahead (Matthew Fisher)
21. Next steps in the international financial architecture (Lorenzo Bini Smaghi)
22. Remarks on "Next steps in the international financialarchitecture" (Richard H. Clarida)
Andrew G. Haldane is Head of International Finance at the Bank of England.