IADB, Research Department Working Paper No. 428
26 Pages Posted: 8 Aug 2000
Date Written: August 2000
Our review of the main proposals on international financial architecture currently under consideration gives reasons for concern that excessive emphasis on improving stability by impeding capital flows will have a deleterious development impact. Sustainable development requires initiatives addressing the failures of international financial markets that make capital flows so small and volatile. Our analysis identifies a number of alternative initiatives and principles to get them right in connection with official support, private sector participation, and reforms to the institutional framework. However, the fact that some of these efficient reforms entail financial risks to supporting developed countries contributes to lack of consensus.
Keywords: international financial architecture, burdensharing, financial rescue, crisis prevention
JEL Classification: F33, F34, F42
Suggested Citation: Suggested Citation
Hausmann, Ricardo and Fernandez-Arias, Eduardo, Getting it Right: What to Reform in International Financial Markets (August 2000). IADB, Research Department Working Paper No. 428. Available at SSRN: https://ssrn.com/abstract=238350 or http://dx.doi.org/10.2139/ssrn.238350