Currency Internationalization and Reforms in the Architecture of the International Monetary System: Managing the Impossible Trinity

Paper No. 5

July 11, 2013

The global financial crisis of 2008–2009, the follow-on Great Recession and the euro area sovereign debt crisis have spurred renewed interest in reforming the international monetary system (IMS). On account of its sheer complexity, pervasiveness and persistence, the North Atlantic financial crisis of 2008 and its global after-effects have brought these issues to a head.

This paper attempts to evaluate the proposals on various facets of the IMS that are on the table, and to set out some responses that reflect an Indian and emerging and developing economy standpoint in the debate.

Part of Series

The BRICS and Asia, Currency Internationalization and International Monetary Reform

In December 2012, the Asian Development Bank, CIGI and the Hong Kong Institute for Monetary Research co-hosted a conference in Hong Kong, China. The papers in this series, authored by esteemed academic and policy experts, were presented at the conference and were subsequently revised. These working papers are being published simultaneously by all three partners.

About the Authors

Rakesh Mohan currently serves as an executive director of the International Monetary Fund (IMF), representing Bangladesh, Bhutan, India and Sri Lanka. He was professor in the practice of international economics and finance and senior fellow at Yale University from July 2010 until November 2012.

Michael Debabrata Patra is a career central banker with close to 30 years of experience in various positions in the Reserve Bank of India, India’s central bank, which he joined in 1985. He is currently adviser-in-charge of the Monetary Policy Department of the Reserve Bank at its central office located in Mumbai, India, a position he also held from 2005 to 2008. He has a Ph.D. in economics from the Indian Institute of Technology, Mumbai, in the area of international finance. 

Muneesh Kapur is adviser to executive director for Bangladesh, Bhutan, India and Sri Lanka, IMF, Washington, DC since 2012. Prior to this, he was director, Monetary Policy Department, Reserve Bank of India. He joined the Reserve Bank of India in 1990. He holds a master’s degree in economics.