Jump to ContentJump to Main Navigation
Reforming the International Financial System for Development$
Users without a subscription are not able to see the full content.

Jomo Kwame Sundaram

Print publication date: 2011

Print ISBN-13: 9780231157643

Published to Columbia Scholarship Online: November 2015

DOI: 10.7312/columbia/9780231157643.001.0001

Show Summary Details
Page of

PRINTED FROM COLUMBIA SCHOLARSHIP ONLINE (www.columbia.universitypressscholarship.com). (c) Copyright University of Minnesota Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CUPSO for personal use.date: 02 July 2022

Special Drawing Rights and the Reform of the Global Reserve System

Special Drawing Rights and the Reform of the Global Reserve System

(p.314) 13 Special Drawing Rights and the Reform of the Global Reserve System
Reforming the International Financial System for Development

José Antonio Ocampo

Columbia University Press

This chapter calls for a reform of the international reserve system to address its three fundamental flaws: it has a deflationary bias as the burden of adjustment falls on deficit countries; it has inherent sources of instability associated with the use of a national currency as the major reserve asset and the high demand for foreign exchange reserves by developing countries, due to the pro-cyclical nature of cross-border capital flows and the inadequate availability of “collective insurance”; it exacerbates inequities by transferring resources to reserve currency-issuing countries. The chapter proposes a new system based on the countercyclical issue of Special Drawing Rights (SDRs) to finance International Monetary Fund (IMF) facilities, together with a network of regional reserve funds. It also stresses the need to consider regional monetary arrangements as part of the broader reform of the international monetary system. Finally, it highlights two complementary reforms: placing the IMF at the center of world macroeconomic policy management and rethinking the regulation of capital accounts in light of a reformed global financial system.

Keywords:   international reserve system, foreign exchange reserves, developing countries, Special Drawing Rights, International Monetary Fund, regional reserve funds, regional monetary arrangements, international monetary system, macroeconomic policy, capital accounts

Columbia Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us .