Advantages And Disadvantages Of The Global Financial Crisis

1698 Words7 Pages
The global financial crisis has found problems of the world economy and identified disadvantages in the current monetary system. Status of the US dollar as key currency has been challenged and nowadays there is a discussion of how new system should be looked like. Economists, policymakers and non-governmental organizations have made new suggestions. The paper provides an overview of some proposals that were offered. Key words: international monetary system, reserve currency, special drawing rights, gold, global financial crisis Introduction The crisis calls for reform of the existing international monetary system towards an international reserve currency with a stable value, rule-based issuance and manageable supply. The main objective of the reform is to ensure global economic and financial stability. After the crisis of 2008, there is renewed discussion of the need to reform the global financial and monetary architecture.…show more content…
• SDR should be used as reserve basis for monetary system and IMF can issue SDR for financing its credit lines. • IMF should implement new advanced mechanisms for macroeconomic policy coordination. • System of reference rates could be used among different countries. • It is necessary to establish appropriate regulation of international capital flows. • During crises adequate financing of balance of payments is essential. • International debt management mechanisms should be developed to solve problem of over-indebtedness. The new international monetary system does not require new foundations. The reform should be built on improvement of existing mechanisms and should include global monetary policy co-operation. After the recent crisis many scientists propose various projects of reforming the world monetary system and the most prospective of them are: • introduction of regional currencies; • creation a unified global reserve
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