|
April 21, 2003
Economist Joshua Aizenman examines proposed reforms
to global financial system
By Jennifer McNulty
Economist Joshua Aizenman is at the forefront of discussions of how
to modify the global financial system to alleviate the types of financial
crises that shook the world economy during the 1990s.
|
The policy brief is the second in a series published by the
UCSC Center for Global, International, and Regional Studies.
|
In a new policy brief, Aizenman argues that current proposals would
fail the test of markets and politics.
Proposed reforms focus on reducing the probability of a crisis and
helping bring about the swift resolution of any that should occur. Such
strategies, although worthwhile, are insufficient, says Aizenman, who
calls for pragmatic solutions that build on politically and financially
proven institutions, including:
• A more stringent application of capital and reserve requirements;
• Coordination of regulations across countries by the Bank for
International Settlements and the International Monetary Fund;
• Coordination among creditors, and the formation of international
bankruptcy procedures.
Aizenman’s analysis, "Reforming the Global Financial System,"
is available online.
The policy brief is the second in a series published by the UCSC Center
for Global, International, and Regional Studies.
Aizenman, a professor of economics at UCSC, advocates mitigating the
exposure of banks by imposing regulations on their reserves and capital.
Although skeptical of proposals that would establish indicators of a
nation's vulnerability, he acknowledges the challenge of designing "proper
interventions."
The Global Policy Brief web site showcases research and opinions on
international matters of widespread interest and was designed to narrow
the gap between academics, policy makers, and the public.
Return to
Front Page
|