Search

The paper treats the eco currency union project in West Africa and its implications for monetary policies against the backdrop of the international monetary order from a post-Keynesian perspective. The eco zone project envisions a common monetary union of the West African Economic and Monetary Union (WAEMU), i.e. the independent Western subzone of the CFA franc union, and the remaining non-CFA countries of the Economic Community of West African States (ECOWAS) with Nigeria and Ghana as the economically most important member states. The literature on the international currency hierarchy developed by Latin-American structuralists and the post-Keynesian Berlin School of thought focuses on the notion of a currency-specific liquidity premium that structurally determines the interest rate level in the corresponding currency areas. Based on this set of literature, we conduct a comparison between the liquidity premia of the Western CFA-franc, the Nigerian naira and the Ghanaian cedi to make conjectures about what implications a common ECOWAS currency union would have regarding monetary policy space. Being a non-pecuniary variable, the liquidity premium cannot be observed directly. We therefore approximate the liquidity premium by calculating differences in interest rates such as the central bank’s base rate, the coupon rate on T-bills and bonds and the interest rate spread between Eurobonds and bonds denominated in local currency. Besides, we use balance of payment data to identify external financial fragilities that might become a crucial factor for monetary policy due to an increasing financialisation in West African economies. We find that investors demand structurally higher yields on bonds originating in Ghana and Nigeria than in the CFA-franc zone. One could interpret this as the FA-franc conveying over a higher liquidity premium because it has to have lower yields rates to compensate for liquidity-differences to financial assets denominated in the US dollar or euro. However, another explanation is that expectations about the future developments of the cedi’s and naira’s exchange value by investors are more pessimistic in comparison to that of the CFA-franc. This is rooted in two major factors: Firstly, under the current arrangement, France still has leeway in monetary policy making and acts as exchange rate stabiliser by pushing for restrictive monetary policies and guaranteeing foreign exchange reserve provision. Secondly, the estimation of external financial fragility in the WAEMU, Nigeria and Ghana shows that the naira implies a greater risk of sudden devaluation compared to the Western CFA franc and the cedi due to Nigeria’s higher exposure to mobile liabilities vis-à-vis its asset endowments.

Im November 2016 einigte sich Ägypten mit dem Internationalen Währungsfonds (IWF) auf ein umfassendes Hilfsprogramm. Erklärtes Ziel war es, das Land innerhalb von drei Jahren makroökonomisch zu stabilisieren und auf einen inklusiven wirtschaftlichen Wachstumspfad zu führen. Zur Halbzeit wird deutlich: Die damals gesetzten Konditionalitäten ermöglichten zwar eine kurzfristige makroökonomische Stabilisierung, Strukturreformen haben sie aber kaum zur Folge. Vielmehr wird die Herausbildung einer funktionierenden Marktwirtschaft von dem zunehmend einflussreichen Militär verhindert. Hinzu kommt die desaströse Menschenrechtsbilanz der Regierung unter Präsident Abdel-Fatah al-Sisi, die sich ebenfalls negativ auf die wirtschaftliche Entwicklung Ägyptens auswirkt. Deutschland hatte maßgeblichen Anteil am Zustandekommen des IWF-Abkommens. Die Bundesregierung sollte daher darauf hinwirken, dass der IWF die bisherigen Reformen kritischer bewertet. Zudem sollte sie ihre Bereitschaft zur Unterstützung zukünftiger Hilfspakete an eine Verbesserung der Menschenrechtslage und eine Stärkung der Zivilgesellschaft binden. (Autorenreferat)

The dollar's steady depreciation has had little impact on the official reserves of central banks. As scholars of the international monetary system debate whether the dollar can continue to play the dominant role in the international monetary system, actual developments in exchange relations already give reason to expect that the world's currency regime is changing. Recent measures taken by China to internationalize its renminbi, including several bilateral swap agreements signed with other central banks, have reinforced other eastward trends in the world economy. In this paper, China's acceleration of renminbi internationalization is examined. The growth of renminbi-based trade and settlements has made it Asia's new reference currency, surpassing the US dollar. These developments are mostly due to the effects of the financial crisis and have been supported by the region's economic and financial integration. As a reference currency of necessity or choice, the emergence of the renminbi in Asia is set to weaken the current global dominance of the US dollar. In conclusion, the paper makes the case that the growth of the renminbi as an international currency could generate a multipolar currency system that balances and distributes responsibilities in a better way than the current currency regime.

The squeeze in United States dollar liquidity that emerged with the global financial crisis highlighted the risks inherent in the current global financial system. Asia was adversely affected by the crisis not only because of its dependence on trade, but also because of its heavy reliance on the US dollar for regional and international transactions. As Asia's role in the global economy continues to expand, its dependence on the US dollar is bound to increase, raising further its vulnerability to future liquidity shocks. The use of regional currencies for bilateral trade settlement could reduce such vulnerability. As demonstrated by the renminbi trade settlement scheme piloted between the People's Republic of China; Hong Kong, China; and Macao, China, the existence of appropriate financial infrastructure could reduce the relatively larger costs of bilateral currency transactions compared with triangular transactions through the United States dollar. As most central banks are securities depositories of government bonds, combining trade settlement with government bond securities settlement could also have large synergy effects without substantial extra costs. This proposal does not require full liberalization of the capital account or full deregulation of capital markets, and is more politically feasible in transition. As such, extending the trade settlement scheme to the rest of Asia and appending a government bond payment and securities settlement system could be a practical solution to international monetary system reform and the diversification of settlement currencies.

The squeeze in US dollar liquidity that emerged with the global financial crisis highlighted the risks associated with the current global financial system. Asia was adversely affected by the crisis not only because of its dependence on trade, but also because of its heavy reliance on the US dollar for regional and international transactions. As Asia's role in the global economy expands further, its dependence on the US dollar is bound to increase, raising even more its vulnerability to future liquidity shocks. The use of regional currencies for bilateral trade settlement could reduce such vulnerability. As demonstrated by the renminbi trade settlement scheme piloted between the People's Republic of China and Hong Kong, China, the existence of appropriate financial infrastructure could reduce the relatively larger costs of bilateral currency transactions compared with triangular transactions through the US dollar. As most central banks are securities depositories of government bonds, combining trade settlement with government bond securities settlement can also have large synergy effects without much extra costs. This proposal does not require full liberalization of the capital account or full deregulation of capital markets, and is more politically feasible in transition. As such, extending the trade settlement scheme to the rest of Asia and appending a government bond payment and securities settlement system could be a practical solution to international monetary system reform and the diversification of settlement currencies.

We analyze three related but distinct concepts concerning the renminbi's role in the global monetary system: (i) internationalization of the currency; (ii) currency convertibility; and (iii) reserve currency status. Their sequencing in relation to other policy goals such as financial sector reforms and exchange rate flexibility will affect their benefit-risk tradeoffs. We describe the measures taken and progress attained in each of these areas, and discuss the implications of these changes for the balance and sustainability of China's own economic development as well as the associated implications for the global monetary system. While China is actively promoting the internationalization of its currency, it is a long way from attaining full convertibility or meeting other prerequisites for achieving reserve currency status. Ultimately, China will proceed with capital account convertibility in its own controlled and gradual manner, with the goal being an open capital account but with significant administrative and other soft controls. The renminbi will play an increasingly important role in the international monetary system but is unlikely to displace the U.S. dollar anytime soon.

1\. Introduction 5 2\. Domestic Stability or International Coordination 7 3\. State Preferences and Institution Design 10 3.1 Domestic Factors 10 3.2 International Factors 12 3.3 Method 13 4\. From Non-Coordination to Direct Negotiation 14 4.1 Non-Coordination Period 14 4.2 Direct Negotiation and Country-Specific Recommendation 15 4.3 Coordination and Surveillance 17 4.4 Obstacle of Coordination 18 5\. The EU: From the EMS to the EMU 19 5.1 The Delors Report: Framing the Problem 19 5.2 The EU and Inflation Targeting 20 5.3 The EU as the a Promoter of Central Bank Independence 21 6\. The BIS and the IMF Research Department 22 6.1 The BIS 22 6.2 IMF Research Department 23 7\. The Internationalization of the Norm of Price Stability Targeting 24 7.1 World Economic Outlook: Institutionalization of the Norm of Inflation Targeting 25 8\. Analysis and Conclusion 26 Literature 29 Appendix 34, During the 1990s, a consensus consolidated among policy makers and economists worldwide regarding the desirability of very low inflation targeting. So far, this process has been explained on the basis of a domestic-functional thesis, according to which commitment to very low inflation provides local economic gains with no costs. In this paper, I present an alternative explanation, according to which the global norm of very low inflation targeting was consolidated as a political solution to the problem of exchange rate misalignment and volatility. I argue that policy makers in Germany and the US believed that convergence of monetary policies and inflation rates, in addition to liberalization of financial markets, will stabilize exchange rates without the need for direct coordination. The paper employs the theory of liberal intergovernmentalism as a benchmark to explain the choice of the European and the G-5/7 countries to establish a low-inflation rule-based international monetary regime. The paper concludes that the regime of very low inflation targeting was consolidated as a politically viable solution to a political problem rather than as an economic best practice. Furthermore, it concludes that the norm of very low inflation targeting was a “corer solution” that neglected the problem of exchange rate stability.

Zu den Prioritäten der französischen G20-Präsidentschaft zählt eine Stärkung und Stabilisierung des internationalen Währungssystems. Dabei verfolgt Paris das Ziel einer größeren strukturellen Symmetrie des Währungssystems, die jedoch kaum zu realisieren sein wird. Zugleich stellt für Frankreich der Abbau von makroökonomischen Ungleichgewichten einen wichtigen Schritt zu mehr Stabilität dar. Die Stärkung der Finanzmarktregulierung bildet die zweite Priorität der französischen Präsidentschaft. Ergänzend zu einer Verschärfung der Kontrolle des Finanzsektors - ein Thema, das seit Beginn der Finanzkrise einen wichtigen Platz auf der Agenda der G20 einnimmt - möchte Frankreich den Kampf gegen Regulierungs- und Steuerparadiese fortsetzen. Die soziale Dimension der Globalisierung stellt einen weiteren Punkt der französischen Agenda dar. Mit den Themen Regulierung der Rohstoffmärkte sowie Beschäftigung und soziale Sicherung setzt Frankreich hierbei neue Akzente, die jedoch zugleich Spannungen zwischen Nord- und Südstaaten der G20 zu Tage treten lassen. Obwohl die G20 zu einem der wichtigsten internationalen Foren geworden ist, scheint Optimismus wenig angebracht. So kann sich das Gremium jeweils nur einigen der zahlreichen Herausforderungen der globalen Wirtschaft widmen, und die große Vielfalt seiner Mitglieder macht einen tragfähigen Konsens unwahrscheinlich. Durant sa présidence du G20 en 2011, la France souhaite contribuer au renforcement et à la stabilisation du Système monétaire international. À cette fin, elle vise à la fois un fonctionnement moins asymétrique du SMI, qui a cependant peu de chance d'aboutir, et la réduction des déséquilibres macroéconomiques internationaux. Parmi les priorités que Paris veut approfondir se trouve également le renforcement de la régulation financière. Parallèlement à la mise en place d'un meilleur contrôle du secteur financier, qui a émergé sur l’agenda du G20 avec la crise financière, la France aimerait poursuivre la lutte contre les juridictions dites non coopératives. La présidence française du G20 souhaite enfin traiter de la dimension sociale de la mondialisation et fixe ce faisant quelques priorités novatrices: d'une part la régulation des marchés de matières premières; d'autre part les questions liées à l'emploi et à la protection sociale, qui font l'objet d'un clivage Nord-Sud. Alors que le G20 est devenu une structure de concertation internationale de premier plan, l'optimisme n'est pas de mise. Non seulement le G20 ne peut se concentrer que sur quelques questions centrales pour l'économie mondiale, mais la grande diversité de ses membres rend également très improbable l'obtention d’un consensus fort. During its G20 presidency in 2011, France wished to contribute to the reinforcement and stabilization of the International Monetary System. For this purpose, France aimed for a less asymmetric functioning of the IMS, though it has few chances to be put into action, and at the same time a reduction of international macroeconomic imbalances. Among other French priorities is the strengthening of financial regulation. Parallel to a greater control of the financial sector, which has been put on the G20 agenda as a reaction to the financial crisis, France also would like to continue the fight against non-cooperative jurisdiction. The French G20 presidency also wishes to address the social dimension of globalization and thus to define some groundbreaking priorities: on one hand stricter regulation of the commodity market and on the other hand to address the North-South divide between opinions on employment and social insurance. Even though the G20 has become a leading mechanism for international concertation, there is no reason for optimism. Not only does the G20 focus merely on a small selection of questions of global economy, but also the diversity of its members makes it unlikely to reach a strong consensus.

Though the renminbi is not yet convertible, the international monetary regime has already started to move towards a 'multipolar' system, with the dollar, the Chinese currency and the euro as its key likely pillars. This shift corresponds to the long-term evolution of the balance of economic weight in the world economy. Such an evolution may mitigate some flaws of the present (non-) system, such as the rigidity of key exchange rates, the asymmetry of balance-of-payments adjustments or what remains of the Triffin dilemma. However it may exacerbate other problems, such as short-run exchange rate volatility or the scope for 'currency wars' while leaving key questions unresolved, such as the response to capital flows global liquidity provision. Hence, in itself, a multipolar regime can be both the best and the worst of all regimes. Which of these alternatives will materialise depends on the degree of cooperation within a multilateral framework.

The main strength of today’s international monetary system – its flexibility and adaptability to the different needs of its users – can also become its weakness, as it may contribute to unsustainable growth models and imbalances. The global financial crisis has shown that the system cannot afford a benign neglect of the global public good of external stability, and that multilateral institutions and fora such as the IMF and the G20 need to take the initiative to set incentives for systemically important economies to address real and financial imbalances which impair stability. We draw this core conclusion from a systematic review of the literature on the current international monetary system, in particular its functioning and vulnerabilities prior to the global financial crisis. Drawing from this analysis, we assess the existing and potential avenues, driven partly by policy initiatives and partly by market forces, through which the system may be improved.

This paper assesses whether the international monetary system is already tripolar and centred around the US dollar, the euro and the Chinese renminbi (RMB). It focuses on what we call China’s “dominance hypothesis”, i.e. whether the renminbi is already the dominant currency in Asia, exerting a large influence on exchange rate and monetary policies in the region, a direct reference to the old “German dominance hypothesis” which ascribed to the German mark a dominant role in Europe in the 1980s-1990s. Using a global factor model of exchange rates and a complementary event study, we find evidence that the RMB has become a key driver of currency movements in emerging Asia since the mid-2000s, and even more so since the global financial crisis. These results are consistent with China’s dominance hypothesis and with the view that the international monetary system is already tri-polar. However, we also find that China’s currency movements are to some extent affected by those in the rest of Asia.

Zu den Prioritäten der französischen G20-Präsidentschaft zählt eine Stärkung und Stabilisierung des internationalen Währungssystems. Dabei verfolgt Paris das Ziel einer größeren strukturellen Symmetrie des Währungssystems, die jedoch kaum zu realisieren sein wird. Zugleich stellt für Frankreich der Abbau von makroökonomischen Ungleichgewichten einen wichtigen Schritt zu mehr Stabilität dar. Die Stärkung der Finanzmarktregulierung bildet die zweite Priorität der französischen Präsidentschaft. Ergänzend zu einer Verschärfung der Kontrolle des Finanzsektors - ein Thema, das seit Beginn der Finanzkrise einen wichtigen Platz auf der Agenda der G20 einnimmt - möchte Frankreich den Kampf gegen Regulierungs- und Steuerparadiese fortsetzen. Die soziale Dimension der Globalisierung stellt einen weiteren Punkt der französischen Agenda dar. Mit den Themen Regulierung der Rohstoffmärkte sowie Beschäftigung und soziale Sicherung setzt Frankreich hierbei neue Akzente, die jedoch zugleich Spannungen zwischen Nord- und Südstaaten der G20 zu Tage treten lassen. Obwohl die G20 zu einem der wichtigsten internationalen Foren geworden ist, scheint Optimismus wenig angebracht. So kann sich das Gremium jeweils nur einigen der zahlreichen Herausforderungen der globalen Wirtschaft widmen, und die große Vielfalt seiner Mitglieder macht einen tragfähigen Konsens unwahrscheinlich. Durant sa présidence du G20 en 2011, la France souhaite contribuer au renforcement et à la stabilisation du Système monétaire international. À cette fin, elle vise à la fois un fonctionnement moins asymétrique du SMI, qui a cependant peu de chance d'aboutir, et la réduction des déséquilibres macroéconomiques internationaux. Parmi les priorités que Paris veut approfondir se trouve également le renforcement de la régulation financière. Parallèlement à la mise en place d'un meilleur contrôle du secteur financier, qui a émergé sur l’agenda du G20 avec la crise financière, la France aimerait poursuivre la lutte contre les juridictions dites non coopératives. La présidence française du G20 souhaite enfin traiter de la dimension sociale de la mondialisation et fixe ce faisant quelques priorités novatrices: d'une part la régulation des marchés de matières premières; d'autre part les questions liées à l'emploi et à la protection sociale, qui font l'objet d'un clivage Nord-Sud. Alors que le G20 est devenu une structure de concertation internationale de premier plan, l'optimisme n'est pas de mise. Non seulement le G20 ne peut se concentrer que sur quelques questions centrales pour l'économie mondiale, mais la grande diversité de ses membres rend également très improbable l'obtention d’un consensus fort. During its G20 presidency in 2011, France wished to contribute to the reinforcement and stabilization of the International Monetary System. For this purpose, France aimed for a less asymmetric functioning of the IMS, though it has few chances to be put into action, and at the same time a reduction of international macroeconomic imbalances. Among other French priorities is the strengthening of financial regulation. Parallel to a greater control of the financial sector, which has been put on the G20 agenda as a reaction to the financial crisis, France also would like to continue the fight against non-cooperative jurisdiction. The French G20 presidency also wishes to address the social dimension of globalization and thus to define some groundbreaking priorities: on one hand stricter regulation of the commodity market and on the other hand to address the North-South divide between opinions on employment and social insurance. Even though the G20 has become a leading mechanism for international concertation, there is no reason for optimism. Not only does the G20 focus merely on a small selection of questions of global economy, but also the diversity of its members makes it unlikely to reach a strong consensus.

The 'currency war', as it has become known, has three aspects: 1) the inflexible pegs of undervalued currencies; 2) recent attempts by floating exchange-rate countries to resist currency appreciation; 3) quantitative easing. Europe should primarily be concerned about the first issue, which relates to the renewed debate about the international monetary system. The attempts of floating exchange-rate countries to resist currency appreciation are generally justified while China retains a peg. Quantitative easing cannot be deemed a 'beggar-thy-neighbour' policy as long as the Fed's policy is geared towards price stability. Current US inflationary expectations are at historically low levels. Central banks should come to an agreement about the definition of price stability at a time of deflationary pressures. The euro's exchange rate has not been greatly impacted by the recent currency war; the euro continues to be overvalued, but less than before.

"Handelspolitik war von Anfang an Gemeinschaftssache, und somit spricht die EU in der WTO mit einer Stimme. Doch in den beiden Bretton-Woods-Institutionen ist dies noch lange nicht der Fall. Woran dies im Einzelnen liegt und was getan werden muss, damit die Europäische Union ein den USA ebenbürtiger Verhandlungspartner wird, zeigt dieser Beitrag auf. Deutschland kann unter seiner EU-Ratspräsidentschaft hierbei wichtige Impulse geben." (Autorenreferat)

"Die Liberalisierung und Deregulierung der internationalen Finanzmärkte hat zu mehreren schweren Wirtschafts- und Finanzkrisen wesentlich beigetragen. Seit Anfang der 90er Jahre verzeichnen wir Währungs- und Finanzkrisen in den unterschiedlichsten Regionen der Welt. Auch langjährige Musterschüler wurden in den Strudel dieser Krisen gerissen. Diese Krisen haben gezeigt, dass die Liberalisierung der Finanzmärkte nicht das geleistet hat, was erhofft worden war. Zu häufig und zu schwer sind die Finanzkrisen, die in dieser Intensität erst durch die Öffnung der nationalen Finanzmärkte ermöglicht wurden. Die internationalen Finanzmärkte stehen zu Recht im Mittelpunkt der Kritik. In anderen Bereichen, z.B. bei ausländischen Direktinvestitionen, hat sich die Globalisierung der Weltwirtschaft als wesentlich unproblematischer gezeigt. Die Politik hat durch Abbau von Regulierung die heutige Situation geschaffen. Nun ist ein Umsteuern nötig. Die Globalisierung erfordert eine ordnungspolitische Gestaltung der Weltwirtschaft. Insbesondere die Finanzmärkte brauchen eine Regulierung, die im nationalen Raum selbstverständlich ist. Nach mehreren Jahren der Diskussion ist es notwendig, der Debatte hinsichtlich der Gestaltung von internationalen Finanzmärkten Maßnahmen folgen zu lassen. Dabei sollten folgende Punkte im Mittelpunkt stehen: Die bisherigen Empfehlungen des IWF hinsichtlich der Gestaltung von Wechselkursregimen müssen überdacht werden. Weder ein so genanntes currency board noch völlig flexible Wechselkurse eignen sich für alle Entwicklungs- und Schwellenländer. Andere, zwischen diesen Ecklösungen liegende Wechselkursregime sind für zahlreiche Entwicklungs- und Schwellenländer geeigneter, bedürften aber der Flankierung durch selektive Kapitalverkehrsbeschränkungen. Weder die Tobin-Steuer noch die modifizierte Variante, die Spahn-Steuer, werden einen nennenswerten Beitrag zur Stabilisierung der Wechselkurse leisten können. Es besteht vielmehr die Gefahr, dass Debatte über die Reform der Finanzmärkte verkürzt wird und auf die Tobin-Steuer begrenzt bleibt. Notwendig sind aber umfassendere Maßnahmen. Ordnungspolitisch wichtig ist ein Maßnahmenpaket zur obligatorischen Einbindung von privaten Gläubigern in die Lösung von Schuldenkrisen. Anders als in der Vergangenheit sollen Gläubiger künftig selbst die Konsequenzen von eigenen Fehlkalkulationen tragen. Zur Ergänzung der Arbeit des IWF soll ein internationales Insolvenzgericht geschaffen werden. Für die Entschuldung überschuldeter Staaten würde damit ein an Regeln gebundenes Verfahren geschaffen werden. Die Kampagne der OECD gegen unregulierte Offshore-Finanzplätze soll fortgesetzt werden. Die Existenz von Finanzplätzen, die keiner Aufsicht unterliegen, erschwert sowohl den Kampf gegen Geldwäsche als auch gegen Kapitalflucht. Kapitalverkehrskontrollen zur Krisenprävention sollten für die meisten Entwicklungs- und Schwellenländern regelmäßig möglich sein. Diese Länder sollten sich vor nur kurzfristig gebundenem Kapital schützen können. Die Schaffung globaler Finanzmärkte erfordert globale Finanzinstitutionen, insbesondere einen so genannten Geldgeber der letzten Instanz. Die Liberalisierung der Kapitalmärkte ist weitgehend vollzogen, aber dieser wichtige Baustein einer globalen Finanzarchitektur fehlt nach wie vor. Deshalb sollte der Internationale Währungsfonds zu einem internationalen 'lender-of-last-resort' ausgebaut werden." (Autorenreferat)

This paper provides a broad empirical examination of the major currencies' roles in international capital markets, with a special emphasis on the first year of the euro. A contribution is made as to how to measure these roles, both from the viewpoint of international financing as well as from the one of international investment activities. Time series of these new measures are presented, including euro aggregates calculated up to five years back in time. The data allow for the identification of changes in the role of the euro (or other main currencies) during 1999 compared to the aggregate of euro predecessor currencies, net of intra-euro area assets/ liabilities, before stage 3 of EMU. A number of key factors determining the currency distribution of international portfolio investments, such as relative market liquidity and relative risk characteristics of assets, are also examined empirically. It turns out that for almost all important market segments for which data are available, the euro immediately became the second most widely used currency for international financing and investment. For the flow of international bond and note issuance it has even slightly overtaken the US dollar in the second half of 1999. The data also suggest that this early supply of euro bonds by non-euro area residents, clearly exceeding the euro-predecessor currency aggregate, is actually absorbed by euro area residents and not y outside investors so far.