{
  "title": "Toward a More Stable International Monetary System, Opening Remarks by Dominique Strauss-Kahn, Managing Director, IMF",
  "publication": "IMF News, February 10, 2011",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sp021011",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sp021011",
  "overlayPath": "/en/news/articles/2015/09/28/04/53/sp021011/index.md",
  "summary": "Event: Lecture and Discussion: \"Towards a more stable international monetary system\"",
  "publishDate": "2011-02-10",
  "sections": [
    {
      "heading": "Context and purpose",
      "content": "- Event: Lecture and Discussion: \"Towards a more stable international monetary system\"\n- Location and date: Washington DC, February 10, 2011\n- Speaker: Dominique Strauss-Kahn, Managing Director, International Monetary Fund\n- Goal: Set out key questions guiding the IMF’s work on international monetary system reform and to invite discussion on policy responses to volatility and systemic risk."
    },
    {
      "heading": "Central diagnosis: volatility as the core problem",
      "content": "- The international monetary system involves reserve currencies, exchange rates, capital flows, and the global financial safety net.\n- Main concern: volatility—money flows that are \"too volatile\" and an unstable external environment that impedes prosperity.\n- Recent history:\n  - The U.S. dollar served as a safe haven asset during the crisis.\n  - Extraordinary international policy cooperation was required to avert a far worse outcome in 2008.\n  - The recovery is underway but \"is not the recovery we wanted\": unemployment remains at record highs and income inequality is widening.\n  - Global imbalances have returned, including large and volatile capital flows, exchange rate pressures, and rapidly growing excess reserves."
    },
    {
      "heading": "Question 1 — How can we strengthen policy cooperation?",
      "content": "- Observations and measures:\n  - The G-20’s Mutual Assessment Process (MAP) is an important first step toward a more permanent framework for global policy cooperation.\n  - IMF surveillance is a critical complement to the MAP and central to the IMF’s mandate.\n  - Steps already taken include early warning and vulnerability exercises.\n  - Increased focus on cross-border impact of countries’ policies, particularly for the five most systemic economies, with new dedicated \"spillover reports\" in preparation.\n  - Deeper analysis of macro-financial linkages is underway.\n  - Countries representing the world’s 25 most systemic financial systems have agreed to mandatory Financial Sector Assessment Programs (FSAPs), facilitating efforts to detect dangerous system-wide risk build-ups.\n  - The IMF is conducting a major review to explore whether more ambitious changes to surveillance are needed."
    },
    {
      "heading": "Question 2 — How best to cope with capital flow and exchange rate volatility?",
      "content": "- Trends and risks:\n  - Over the past decade, there has been a dramatic increase in the size and variability of capital flows.\n  - Capital flows are broadly beneficial but can complicate macroeconomic management and threaten financial stability, especially in economies with shallow financial sectors.\n- Policy toolkit and trade-offs:\n  - Policymakers can use macroeconomic adjustment, reserve accumulation, prudential measures, and, in some cases, capital controls.\n  - Domestic responses can generate cross-border spillovers.\n  - Members have asked the IMF to examine whether globally agreed \"rules of the road\" for managing capital flows are warranted; concrete ideas are expected to be presented in the near future.\n- Exchange rate issues:\n  - Exchange rates sometimes show large and persistent deviations from fundamentals.\n  - Potential mitigation: increasing the use of the SDR as a unit of account to provide a buffer from exchange rate volatility."
    },
    {
      "heading": "Question 3 — How can we enhance liquidity provision in times of extreme volatility?",
      "content": "- Current progress:\n  - Since the crisis, the global financial safety net has been strengthened: the Fund’s resource base has been increased and the financing toolkit broadened, including the Flexible Credit Line and the Precautionary Credit Line.\n- Remaining challenges:\n  - Many countries remain unconvinced that the global financial safety net is adequate, leading to continued costly reserve accumulation in excess of precautionary needs.\n- Options to improve systemic liquidity provision:\n  - Strengthen partnerships with regional financing arrangements.\n  - Improve the predictability of systemic liquidity provision rather than leaving it predominantly to national central banks.\n  - Better gauge the adequacy of precautionary reserves and develop appropriate benchmarks."
    },
    {
      "heading": "Role of the SDR (Special Drawing Right)",
      "content": "- Ideas presented in an IMF paper published the same day include:\n  - Increasing the global stock of SDRs to help meet countries’ demand for precautionary reserves.\n  - Using the SDR to price global trade and denominate financial assets to provide a buffer from exchange rate volatility.\n  - Issuing SDR-denominated bonds to create a potentially new class of reserve assets.\n- Currency composition considerations:\n  - Adding emerging market currencies—such as the renminbi—could aid the internationalization of these currencies and benefit the system.\n- Technical and institutional hurdles:\n  - Ensuring SDR allocations are used in ways consistent with global macroeconomic stability.\n  - Facilitating trading of SDR-denominated assets.\n  - Increasing the SDR’s role would require a major leap in international policy coordination; evolution is expected to be gradual and tied to changes in the global economy."
    },
    {
      "heading": "Conclusions and outlook",
      "content": "- The international monetary system’s issues are wide-ranging and complex; the global debate is only beginning.\n- Addressing these issues is directly connected to achieving a well-balanced and sustainable recovery and to preventing future crises.\n- The speaker looks forward to continued discussion and input on these themes.\n\nOpening Remarks by Dominique Strauss-Kahn, Managing Director, International Monetary Fund, February 10, 2011\n\n---\n\n Content in this bundle\n\n- 010711pdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Special Drawing Rights (SDRs) -- A Factsheet\n- IMF Policy Advice -- A Factsheet\n- Speeches\n- PRESS CENTER\n- Dominique Strauss-Kahn\n- Towards a more stable international monetary system\n- IMF Managing Director Calls for Strengthening the International Monetary System\n- IMF Executive Board Concludes the Meeting on Enhancing International Monetary Stability—A Role for the SDR?\n- Enhancing International Monetary Stability—A Role for the SDR?\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/sp021011"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2015/09/28/04/53/sp021011/index.md)",
    "[Structured JSON version](/en/news/articles/2015/09/28/04/53/sp021011/index.json)",
    "[Bundle manifest](/en/news/articles/2015/09/28/04/53/sp021011/bundle-manifest.json)",
    "Published: February 10, 2011",
    "Event: Lecture and Discussion: \"Towards a more stable international monetary system\"",
    "Location and date: Washington DC, February 10, 2011",
    "Speaker: Dominique Strauss-Kahn, Managing Director, International Monetary Fund",
    "Goal: Set out key questions guiding the IMF’s work on international monetary system reform and to invite discussion on policy responses to volatility and systemic risk.",
    "The international monetary system involves reserve currencies, exchange rates, capital flows, and the global financial safety net.",
    "Main concern: volatility—money flows that are \"too volatile\" and an unstable external environment that impedes prosperity.",
    "Recent history:",
    "Observations and measures:",
    "Trends and risks:",
    "Policy toolkit and trade-offs:",
    "Exchange rate issues:",
    "Current progress:",
    "Remaining challenges:",
    "Options to improve systemic liquidity provision:",
    "Ideas presented in an IMF paper published the same day include:",
    "Currency composition considerations:",
    "Technical and institutional hurdles:",
    "The international monetary system’s issues are wide-ranging and complex; the global debate is only beginning.",
    "Addressing these issues is directly connected to achieving a well-balanced and sustainable recovery and to preventing future crises.",
    "The speaker looks forward to continued discussion and input on these themes.",
    "[010711pdf (PDF)](/-/media/websites/imf/imported/external/np/pp/eng/2011/_010711pdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Dominique Strauss-Kahn](https://www.imf.org/external/np/omd/bios/dsk.htm)",
    "[Towards a more stable international monetary system](https://www.imf.org/external/np/seminars/eng/2011/ims/index.htm)",
    "[IMF Managing Director Calls for Strengthening the International Monetary System](https://www.imf.org/external/np/sec/pr/2011/pr1136.htm)",
    "[IMF Executive Board Concludes the Meeting on Enhancing International Monetary Stability—A Role for the SDR?](https://www.imf.org/external/np/sec/pn/2011/pn1122.htm)",
    "[Enhancing International Monetary Stability—A Role for the SDR?](https://www.imf.org/external/pp/longres.aspx?id=4523)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "related": [
    {
      "title": "010711pdf",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported/external/np/pp/eng/2011/_010711pdf.pdf",
      "binary": {
        "path": "/-/media/websites/imf/imported/external/np/pp/eng/2011/_010711pdf.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/news/articles/2015/09/28/04/53/sp021011/index.md",
    "json": "/en/news/articles/2015/09/28/04/53/sp021011/index.json",
    "bundleManifest": "/en/news/articles/2015/09/28/04/53/sp021011/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-27T09:19:09.160Z"
}