Monetary System Weaknesses

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This well-researched document endeavors to highlight the few strengths, many weaknesses, a few opportunities trailed by some threats to the International Monetary System.

The current global financial crisis got everyone’s attention by fabricating a focal point around international macroeconomic and financial inspection. What went on before the crisis was characterized by unparalleled robust global development, pooled with low rates of inflation, low rates of interest and low risk premia. Nevertheless, in unison to the above stated scenario, the global financial system experienced an alarmingly dreadful build-up of universal risks, stimulated by the increment in financial and economic imbalances in various countries all around the world in addition to unnecessary and unwarranted influence by market participants. The complicated nature of the crisis has initiated an increasing number of justifications as to its reason and an assorted range of policy recommendations for re-establishing international stability.

The International Monetary System can be illustrated as an international agenda for cross-border financial dealings, i.e. the series of broader conditions and rules that add force to balance of payments transactions, like the distributing and using the international currencies, exchange rate regimes, and capital flow and quickly increasing interconnectedness amongst countries, and even those which are at diverse levels of financial and economic expansion. If at all possible, the international monetary system ought to offer a steady environment to assist the worldwide flow of payments, provide liquidity to countries and facilitate international financial intermediation so tha...

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...el Camdessus, Alexandre Lamfalussy and Tommaso Padoa-Schioppa, (2011) REFORM OF THE INTERNATIONAL MONETARY SYSTEM: A COOPERATIVE APPROACH FOR THE TWENTY FIRST CENTURY a PALAIS-ROYAL INITIATIVE* Available from [18th April 2014]
Eric Santor, (2011) The International Monetary System: An Assessment and Avenue for Reform International Economic Analysis Department, and Lawrence Schembri, Adviser Available from
[18th April 2014]
THE FINANCIAL CRISIS AND THE STRENGTHENING OF GLOBAL POLICY COOPERATION 2011 Available from [18th April 2014]
Andrew Crockett, Morris Goldstein Strengthening the International Monetary System: Exchange Rates
Board of Governors of the Federal Reserve System. Federal Reserve Act. Section 2A. The Aprul
Available from : [17 april 2014]

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