Systemic challenges in the international monetary system

The tensions and troubles in today’s global economy emerge from the interaction between weak effective demand and persistent financial instability. The global financial crisis in 2008 was a reminder of the economic and social damage that such an interaction can generate. Much of the subsequent reform effort has concentrated on repairing bank balance sheets, strengthening regulatory frameworks and improving the resilience of financial institutions to shocks through actions at the national and international levels. This is an ongoing process (see chapter IV of this Report). But the success of such efforts is closely related to global macroeconomic forces whose current weakness stems partly from the malfunctioning of the existing international monetary system (IMS).

Related Subject(s): International Trade and Finance