Should-Read: Barry Eichengreen: Asia Needs to Spell Out Changes They Want in International Monetary System: "China and Asia need an international monetary system that is stable...
...eliminates imbalances smoothly... provide[s] emergency assistance where it is needed.... The problem of IMF stigma... remains as potent as ever.... CMIM... has yet to be activated.... The adequacy of the actual existing global financial safety net is less than meets the eye.... Countries with deficits don't want to allow their currencies to depreciate because doing so will increase the burden of servicing foreign-currency debts. Countries in surplus hesitate to allow their currencies to appreciate for fear of losing competitiveness.... A stronger sanction would be that when a chronic surplus country buys foreign assets with its currency to prevent its exchange rate from rising, the IMF could sell foreign assets in exchange for that same national currency, neutralizing the inappropriate national intervention in the foreign exchange market. Clearly, there would have to be strong support among IMF members for this kind of direct market action. Asian countries could exercise leadership by advocating just such a step...