1. Sogang University, Seoul 8 November 2010
Bretton Woods Moment Lost? Financial Reform Proposals by the Commission of Experts of the 63rd President of the UN General Assembly
Sogang University, Seoul
8 November 2010

2. Crisis should lead to reform
A crisis foretold
International financial architecture: non-system?
Ideology: deregulation, self-regulation,
inadequate and inappropriate regulation
Financial globalization: growth, stability?
Capital account liberalization vs IMF Article 6
Policy: market-led? Pro- or counter-cyclical?
Finance’s inflation fetish? Public sector deficit?
Reserve currency  Unsustainable global imbalances
International cooperation: G7  G20, UN?

3. Lost Bretton Woods moment?
Bretton Woods, 1944: United Nations conference on monetary + financial affairs
15 years after 1929 Depression
Middle of WW2
US initiative vs UK Treasury stance
44 countries (28 developing countries; 19 LA)
UN system: IMF, IBRD, ITO
Clear emphasis on sustaining growth, job creation, post-war reconstruction, post- colonial development, not just monetary + financial stability

4. Reform initiatives UN PGA (Stiglitz) Commission of Experts
June 2009 summit on crisis + impact on developing countries
G7  G20: more inclusive? legitimate? crisis-management, but not inclusive, developmental, equitable
Financial Stability Forum  F S Board
Pittsburgh Summit promise: Finance Ministers’ and Deputies’ expert and working groups

5. G20 achievements largely development-friendly
Coordinate monetary, fiscal stimuli
Sustain recovery efforts
Limit protectionism
Strengthen IMF, governance reform
Strong, sustained, balanced, resilient growth framework
Financial safety nets: FCL, PCL
Financial inclusion

6. G20 success double-edged
Ensure effective + coherent financial regulation (Basel 3, FSB)
- FSB strengthening
- Basel 3 capital requirements
- shadow banking?
MAP: mutual surveillance outside IMF
Limit executive remuneration no agreement
G20 institutionalizaton will marginalize or capture inclusive multilateralism (BWIs, UN)

7. Crisis roots International financial architecture:
non-system since 1971 end of BW
Lack of reserve currency system  unsustainable global imbalances
Financial deregulation
- deregulation, self-regulation
- inadequate + inappropriate regulation
Capital account liberalization

8. Broader reform agenda
Ensure macro-financial stability with counter- cyclical macroeconomic policies + prudential risk management, including
capital controls
Monterrey policy coherence: Align IMF, WB with UN development agenda, IADGs
UN: universal, legitimate, but not allowed to lead comprehensive, systemic reform process

9. Financing for development
Domestic resource mobilization, including taxation
Trade: Developmental Round
Aid effectiveness
Debt workouts  sustainability
Access to international capital
Systemic issues, incl. governance

10. FfD priorities
Sufficient financing for development Coherent, enabling development friendly international policy environment Supportive international frameworks for trade, taxation, technology, debt resolution, climate change mitigation + adaptation for sustainable development

11. G20 FfD initiatives?
Better mobilize private capital for infrastructure financing (EIB, bonds)
(1) Framework (for Strong, Sustainable, Balanced Economic Growth) +
(2) financial safety nets should include: consistently counter-cyclical policies, institutions, instruments, mechanisms
Innovative financing for development?
SDR emissions: liquidity, counter-cyclical, developmental?

12. Stiglitz Commission: New institutions
Global Economic Coordination Council
democratically representative G-20/L27
include UN system chief executives and Heads of Government
coordinate international adjustment of imbalances
International Expert Panel (model: IPCC)
New Financing Facility
New International Reserve Currency

13. Other proposed institutions
International Debt Restructuring Tribunal
Independent of IMF (unlike DRM proposal)
Replace World Bank’s ICSID
Foreign Debt Commission
Intergovernmental Commission on Tax Cooperation (for resource mobilization)
Multilateral Regulations
International Tax Compact
Global Financial Authority
New Policy Surveillance Mechanism
Independent of IMF
Support national capital account management

14. Thank you Please visit the following websites: UN-DESA www.un.org
Policy briefs
Research papers
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