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The Global Liquidity Safety Net: Institutional Cooperation on Precautionary Facilities and Central Bank Swaps

Friday, 20 March 2015
publication
C. Randall Henning
A country’s qualification for the IMF’s Flexible Credit Line should open access to the precautionary facilities of regional financial arrangements and to central bank swaps.

The UK shows a way to break out of Washington’s yoke on global economic affairs

Tuesday, 17 March 2015
blog
The UK has reasserted its desire to be a leader in the world economy. If it pries some followers away from the US, we could end the inertia that has beset global policy making in recent years. Prime Minister David Cameron’s pledge to join the Asian Infrastructure Investment Bank (AIIB) despite the Obama administration's objections is perhaps the most significant development in global economic governance since the BRICS nations decided to formalize their relationship through an annual summit.

Internationalization of the Renminbi: Developments, Problems and Influences

Tuesday, 3 March 2015
publication
Ming Zhang
Due to the 2008-2009 global financial crisis, the Chinese government began to promote renminbi (RMB) internationalization in order to raise its international status, decrease reliance on the US dollar and advance domestic structural reform. This internationalization has achieved progress not only in cross-border trade settlement, but also in the offshore RMB markets. However, the rampant cross-border arbitrage and the relatively slow development of RMB invoicing compared to RMB settlement are becoming increasingly problematic.

Changing Global Financial Governance: International Financial Standards and Emerging Economies since the Global Financial Crisis

Friday, 27 February 2015
publication
Hyoung-kyu Chey
One of the most remarkable changes in global financial governance since the 2008-2009 crisis has been the primary forums that establish international standards extending their memberships to include emerging economies. There are two disparate perspectives in the literature on the impact of this change on international financial regulation: the weakening cooperation view, which sees an attenuation of international cooperation due to this change, and the enduring status quo view, which sees the domination of global financial governance by advanced economies persisting even despite it. This paper presents an alternative — more positive — perspective.

The Influence of RMB Internationalization on the Chinese Economy: Theory and Policy

Thursday, 26 February 2015
publication
Qiyuan Xu, Fan He
Since China's pilot scheme for RMB cross-border settlement was launched in 2009, it has become increasingly important for monetary authorities in terms of macroeconomic policy frameworks. The authors use an analytical model that includes monetary supply and demand to examine the influences of RMB cross-border settlement on China's domestic interest rate, asset price and foreign exchange reserves. They also look at how RMB settlement behaves in different ways with the various items in China's balance of payments.

Central banks may be making a mess of things, but they aren't at "war"

Tuesday, 24 February 2015
blog
I don’t know near enough about Brazil to pass judgement on Guido Mantega’s tenure as the country’s finance minister. But he already has a legacy, for it was he who gave us the “currency war.” Mr. Mantega (in)famously uttered that phrase in 2010 to the delight of headline writers, business channel pundits and foreign-exchange analysts the world over.

The Risk of OTC Derivatives: Canadian Lessons for Europe and the G20

Friday, 20 February 2015
publication
Over-the-counter (OTC) derivatives played an important role in the buildup of systemic risk in financial markets before 2007 and in spreading volatility throughout global financial markets during the crisis. In recognition of the financial and economic benefits of derivatives products, the G20 moved to regulate the use of OTC derivatives. Attention has been drawn to the detrimental effects of the United States and the European Union to coordinate OTC reform, but this overlooks an important aspect of the post-crisis process: the exemption of non-financial operators from OTC derivative regulatory requirements.

Renationalization is about Politics and Not Economics

Friday, 20 February 2015
blog
If there’s a reversal of privatization, why? There are several reasons for a country to renationalize or stop privatization. In some cases, following the prescriptions of the IMF and the World Bank, developing countries privatized industries that were under state control and opened their borders to foreign direct investment.

The Rise of Nationalist Sentiment

Tuesday, 10 February 2015
blog
In our previous posts we talked about how it has become common wisdom that neoliberalist transformations are taking developing countries by storm – irreversibly changing intra-state dynamics, boosting productive capacities, reducing inequality, and enhancing welfare. Instead, recent years have seen a pattern of an increase in state activity in the domestic economy. In some cases, there’s privatization and in others a populist surge of sentiment in favour of greater government involvement in the economy.

The Spread of Privatization

Wednesday, 4 February 2015
blog
Since the 1970s, neoliberalism or the Washington Consensus belief in the virtues of free markets offered us a tantalizing premise: that the accumulation regime of neoliberalism has provided consumers with more for less. The engine of economic growth was no longer the state, but the individual. It was the role of the entrepreneur and consumer, not the government that could produce economic wealth for a society. This was matched with cheap energy, food, raw materials, and labour, otherwise known as the cornerstones of the capitalist bloom, and instrumental inputs into the laissez-faire golden age.
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