Rules and Authorities in International Monetary Arrangements: The Role of the Central Bank

The role of the central bank in international monetary arrangements is examined. The debate about the new international financial architecture is the most extensive debate about monetary arrangements since the 1960s. The current debate has been stimulated by the launch of observations associated wit...

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Bibliographic Details
Published in:The American economic review 2000-05, Vol.90 (2), p.43-47
Main Author: Aliber, Robert Z.
Format: Article
Language:English
Subjects:
Bank loans
Bank reserves
Capital inflows
Capital mobility
Central banks
Currency
Currency devaluation
Economic crisis
Economic reform
Equilibrium exchange rates
Financial institutions
Floating exchange rates
Foreign exchange rates
GDP
Gross Domestic Product
International finance
Investments
Investors
Monetary policy
Reserve assets
Restructuring the International Financial System
Roles
Securities markets
Special drawing rights
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Summary:The role of the central bank in international monetary arrangements is examined. The debate about the new international financial architecture is the most extensive debate about monetary arrangements since the 1960s. The current debate has been stimulated by the launch of observations associated with the Asian financial crisis, including the severe declines in GDP and the sharp depreciation and the extensive overshooting of currency in both nominal and real terms. Moreover, there has been a strong association between a sharp depreciation of these currencies and decapitalization of the banks in these countries. One of the causal links is the revaluation losses incurred by firms that have borrowed from these banks, and a second is the impact of the surge in interest rates on the domestic borrowers from these banks.
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.90.2.43