Reserve Creation and Reserve Pooling in the International Monetary System

15 Pages Posted: 4 Jan 2012

See all articles by Richhild Moessner

Richhild Moessner

Bank for International Settlements (BIS)

William A. Allen

National Institute of Economic and Social Research

Date Written: November 11, 2011

Abstract

The paper reviews the arrangements for meeting additional post-crisis demand for international liquidity. It distinguishes between reserve creation and reserve pooling as a basis for multilateral liquidity facilities; reserve pooling arrangements carry the risk that, in a general crisis, all the members will want to draw at the same time. We analyse the recently-agreed enlargement of the International Monetary Fund from this perspective, and conclude that the IMF will carry much more liquidity risk after its enlargement than it has done in the past.

Keywords: International monetary system, international liquidity, financial crisis

JEL Classification: E58, G01, F31

Suggested Citation

Moessner, Richhild and Allen, William A., Reserve Creation and Reserve Pooling in the International Monetary System (November 11, 2011). Available at SSRN: https://ssrn.com/abstract=1979670 or http://dx.doi.org/10.2139/ssrn.1979670

Richhild Moessner

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

William A. Allen (Contact Author)

National Institute of Economic and Social Research ( email )

2, Dean Trench Street
London, SW1P 3HE
United Kingdom

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