Nearly half a decade after the start of the global economic crisis, the international monetary system remains in turmoil. This working paper provides a broad overview of challenges facing the monetary system today, with particular emphasis on problems most directly relevant to the interests of the BRICS (Brazil, Russian Federation, India, [People’s Republic of] China and South Africa) and Asian nations.
The central challenge is governance — the formulation, implementation, and enforcement of norms for behaviour — in short, the rules of the game. The governance challenge, in turn, may be decomposed into four critical elements: adjustment, liquidity, confidence and leadership. In discussing recent developments and future prospects for each of these four elements, the paper highlights implications for the BRICS and Asia.
