The Redesign of the International Financial Architecture from a Latin American Perspective: Who Pays the Bill?

33 Pages Posted: 21 Apr 2011

See all articles by Eduardo Fernandez-Arias

Eduardo Fernandez-Arias

Inter-American Development Bank (IDB)

Ricardo Hausmann

Harvard University - Harvard Kennedy School (HKS)

Multiple version iconThere are 2 versions of this paper

Date Written: December 2000

Abstract

This paper considers ongoing and proposed reforms of the international financial system in light of Latin America`s recent experience. Most proposals are based on one of three diagnoses: excessive capital flows, insufficient capital flows, and excessively volatile capital flows. While theories of excessive capital flows lack empirical support, these views underlie both current and suggested reforms. A subsequent section evaluates proposals involving official financial support, private sector involvement, and financial standards and regulations. The paper supports measures to reduce contagion and liquidity crises, such as an international bankruptcy court, and attribute Latin American financial difficulties in part to "original sin", countries` inability to borrow long-term in their own currencies.

Suggested Citation

Fernandez-Arias, Eduardo and Hausmann, Ricardo, The Redesign of the International Financial Architecture from a Latin American Perspective: Who Pays the Bill? (December 2000). IDB Working Paper No. 370, Available at SSRN: https://ssrn.com/abstract=1817240 or http://dx.doi.org/10.2139/ssrn.1817240

Eduardo Fernandez-Arias (Contact Author)

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Ricardo Hausmann

Harvard University - Harvard Kennedy School (HKS) ( email )

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