Abstract
In the aftermath of the 2008 crisis, emerging powers engaged in political and legal strategies to challenge the actual framework for global monetary governance. This article examines two categories of monetary strategies designed as “voice” and “exit” plans (Hirschman 1970). For the former, they aimed at gaining more participation inside the International Monetary Fund (IMF). For the latter, strategies were built as legal alternatives to manage future liquidity crises outside the current framework. Using this theoretical classification, this paper identifies institutional responses formulated by the G20 emerging powers in Asia and Latin America after 2008 crisis. The specific approach proposed by this article is to analyse how the legal framework for the management of international money influences their strategies’ design and outcomes. Up to present, it seems voice strategies are promoting only incremental modifications in institutions. Exit strategies, however, have the potential of being more successful. These strategies have been built as a network of bilateral swap contracts between central banks. Asian powers are more engaged in this type of legal strategy. Latin American countries tend to be recipients of these plans. Exit strategies, however, are moving multilateral cooperation away from the IMF, reinforcing institutional fragmentation and uncertainty on how the next liquidity crises would be managed.
Highlights
International Monetary Fund, 1972-1978, Volume I: Narrative and Analysis, International Monetary Fund, Washington DC.The global financial architecture has been stable since the end of World War II and the establishment of the Bretton Woods institutions.[1]
The financial system.[2] Howe-Board (FSB) has its headquarters at the Bank for Interna- term relevance, effectiveness and legitimacy
Born from practices of ted to the Bretton Woods system of “official” money, the post-Bretton Woods agreements, the US dollar and i.e. onshore currencies issued by national systems and its issuer, the Federal Reserve (Fed), became the most subjected to specific and very limited international obli- important engines for the functioning of the internatiogations related to current account transactions
Summary
International Monetary Fund, 1972-1978, Volume I: Narrative and Analysis, International Monetary Fund, Washington DC. The global financial architecture has been stable since the end of World War II and the establishment of the Bretton Woods institutions.[1]. The International Monetary Fund’s (IMF) responsibilities on monetary governance evolved along with significant changes in the international financial system.[2].
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