Download Globalization and Reformation of International monetary system

REFORMATION OF WORLD MONETARY
AND FINANCIAL SYSTEM IN GLOBALIZATION
Kuchukova Nurilya
Doctor of Economics, Professor, Academician of IAI and IEAE,
Eurasian National University named after L.N.Gumilev, Kazakhstan
Annotation
The primary objectives of research are an exposure of global challenges and
problems of functioning of the world monetary-financial system and development of
practical recommendations on their decision.
The research methodology. On the basis of research, systematization,
generalization, analysis of theoretical and practical material on functioning of the
world monetary-financial system in the major developed countries of the world, euro
zone countries and developing economies of proposed measures to reform the
international monetary system and improve the management of global economic and
financial systems.
Value of work and research results. Strategy of providing of world financial
stability in the age of globalization and concrete mechanisms of its practical
realization are offered in the article.
The essence of author’s practical recommendations and offered mechanism of
providing of world financial stability is reduced to the necessity of creating a "
Financial stability fund of the world economy" for the sustainable operation of a new
global reserve currency. The amount of payments to the Fund may vary from 10% of
GDP (for poor countries) to 20% of GDP (for the rich countries). There are also
mechanisms for participation in the formation of the Fund's large transnational
companies (TNCs), transnational banks (TNB). The whole system of formation,
distribution and use of the " Financial stability fund of the world economy" must be
extremely transparent. IMF is necessary annually to report before the UNO and the
heads of all the countries of the world (about 200 countries) about forming and use
of facilities of this Fund.
On a sample calculation, the supposed contribution of " financial stability fund
of the world economy" can make about $ 6 - 12 Trillion, whereas the world of GDP
makes about $ 60 Trillion. This Fund will serve as the "safety cushion " for the
world economy and providing of stable functioning of a new world key currency
created originally on the basis of multicurrency standard on principle of special
drawing rights (SDR) and European Currency Unit ( ECU).
Keywords: world monetary and financial system, reformation, globalization.
In the last two decades of international financial markets, practice of
functioning shows that growing mobility of capitals at global level along with
positive influence showing up in increasing the liquidity of markets and promoting
economic growth, generates simultaneously row of new problems in functioning of
the world financial system:
1)Floating exchange rates even under the condition of the country's healthy
economic and financial policies do not guarantee it against a sudden sag, and then no
less dramatic tides of "hot" short-term speculative money, and related phenomena
such as overheating and instability. For the developing states and countries with a
transitional economy liberalization of capital hides in itself a large danger. As a
result in periods of financial and economic crises the inevitably nascent capital
export in forming markets puts them before a dangerous choice: or constantly to
excite interest rates, to retain a foreign capital, and at the same time and rate of
exchange, weakening to the same an economic general in a country, or to assume a
fall in a currency exchange also with all negative consequences for a national
economy.
2)Free moving of financial resources and easy access to the external borrowing
in combination with the unsteady financial system, finally lead to the exacerbation
of crisis situation of backflow.
3)Financial globalization strengthens financial interdependence of all countries,
including Russia and Kazakhstan, as a result increasing quickly the volume of
international financial transactions and global capital flow with the use of variety of
financial instruments under act of modern electronic technologies, facilities of
communications and information.
4)Its potential instability increases together with globalization of financial
markets (nowadays it is enough to press a few keys on the keyboard of computer and
a sum of money moved from one country into another).
5)Liberalization and deregulation of inter-country capital flow, the streams of
that repeatedly increased under act of globalization, generated the new phenomenon,
is the negative affecting national economy of rapid inflow of foreign investments
foremost short-term and highly liquid.
It is impossible not to mark global challenges and problems that exist in
functioning of the world monetary system, that is taken to the following:
1) Convertibility of dollar in gold provided legitimacy of dollar as leader of all
world currency system, but when this exchange was forbidden, and dollar is not in
order. From the legal point of view, Bretton Woods’ rules accepted in 1944, were
broken .
2) Today it is uncontroversial that the existing presently system of emission of
world currency is uncontrolled, undemocratic and illegal. Financial shocks that test
the practically all countries of the world are convincing proof of imperfection of the
world monetary system, basis of that the dollar of the USA serves as.
3) " overshoot " in financial system of the USA hundreds of billions dollars can
provoke the systemic financial crisis at the international level in future
4) According to David Rosenberg – a former economist of Bank of America Merrull Lynch, the world was flooded by $ 222,5 trillion debt of private and public
sectors, that is equivalent to 362%% of GDP in the world . At all levels of society in
the most industrially developed countries there are too much debts and too small
profits, which is necessary for their payment" [1, c.17].
5) Financial problems of European countries, deficit of the state budget, an
enormous external debt will be rendered strong influence on economic recovery of
ЕС. Therefore there are grounds to expect the origin of new-wave of crisis in the
world economy.
The data of the analysis (table 1) conducted by us, testify that a national debt
on the major developed countries of the world, countries of euro zone and
developing economies of the world is had a tendency to the height in 2010 than in
2008 both in an absolute sum and in percents to GDP. In particular, the national
debt of the USA grew from 38% of GDP in 2008 to 62% in 2010, in Japan
accordingly: from 172% to 198%; in Germany - from 66% to 83%; in Italy - from
106% to 119%; in France - from 68% to 82%, Great Britain - from 52% to 76%; To
Spain - from 41% to 60%; To Greece - from 97% to 143%; in Netherlands - from
58% to 63%; To Belgium - 90% to 101%.
Thus in a prospect situation with a state debt ,a number of countries will not
become better, the forecast national debt was testified the reference book of CIA,
2011. In particular, some increasing of national debt is forecast in percents to GDP
by 2016 in comparison with 2011: to Japan - from 233,1% in 2011 to 253,8% in
2016; To France - from 86,8% to 87,7%; The USA - 100,0% to 115,4%; To Portugal
- from 106,0% to 110,5%; To Spain - from 67,4% to 77,4%; To Ireland - from
109,3% to 114,3%.
Some decline of national debt in percents to GDP is forecast in a prospect on:
to Canada - from 84,1% in 2011 to 72,9% in 2016; To Italy - from 121,1% to
114,1%; To Iceland - from 101,2% to 82,5%; To India - from 62,4% to 59,7%; To
the European union - from 82,3% to 79,5%; To Greece - from 165,5% to 162,8%;
To Germany - from 82,6% to 75,0% Hungary - from 76,1% to 71,5%; To Great
Britain - from 80,7% in 2011 to 80,4% in 2016. [2, reference Book of CIA 2011].
Table 1 - National debt on the countries of the world
Country
State debt on
2010 (billion
of USD)
The USA
9133
Japan
8512
Germany
2446
Italy
2113
India
2107
China
1907
France
1767
Great Britain
1654
Brazil
1281
Canada
1117
Spain
823
Mexico
577
Greece
454
Netherlands
424
Turkey
411
Belgium
398
Egypt
398
Poland
381
South Korea
331
Singapore
309
Chinese
279
Republic
Source: reference Book of CIA 2011
% GDP
Per
man(USD)
State debt on
2008
62%
198%
83%
119%
52%
19%
82%
76%
59%
84%
60%
37%
143%
63%
43%
101%
80%
53%
23%
106%
29158
67303
30024
34627
1772
1427
27,062
26375
6299
32829
17598
5071
42216
25152
5218
38139
4846
9907
6793
65144
(5415, 38%)
(7469, 172%)
(1931, 66%)
(1933, 106%)
(1863, 56%)
(1247, 16%)
(1453, 68%)
(1158, 52%)
(775, 39%)
(831, 64%)
(571, 41%)
(561, 36%)
(335, 97%)
(392, 58%)
(362, 40%)
(350, 90%)
(385, 87%)
(303, 45%)
(326, 24%)
34%
12075
Global financial and economic crisis bared a break between a financial sphere
and real sector. The overheating of financial markets and before all mortgage
became, as one of the factors of bankruptcy of some international banks.
Surmounting the crisis in many countries the stagnation of bank credit and
complication of "bad credits restructuring " is still steady.
Essentially «sovereignization of private debts" was happened: the states forced
to undertake considerable part of banks and corporations debts. The expensive antirecessionary policy, and frequently the unbalanced pre-crisis growth of social
obligations, led to record budget deficits.
Data analysis of " Budgetary bulletin " January, 2012 allow to draw the
conclusion that practically all countries of the world in a crisis 2008-2010 the deficit
of budget rapidly grew: all over the world - from 2,0% to 5,5%; to the countries with
the developed economy - from 3,8% to 7,6%; To the United States - from 6,7% to
10,5%; To the euro zone - from 2,12% to 6,3%; To France - from 3,3% to 7,1%; To
Germany - from 0,1% to 4,3%; To Italy - from 2,7% to 4,5%; To Spain - from 4,2%
to 9,3%; To Japan - from 4,7% to 9,3%; To the United Kingdom - from 4,9% to
9,9%; To Canada - from 0,1% to 5,6%; countries with the formed market - from
0,4% to 3,6% [3].
Кrasavina L.N., honored scientist of Russian Federation, doctor of economics,
professor , marks justly that the "Global financial and economic crisis brought to the
new touch of Jamaican monetary system, educed its inability to provide relative
stability of currency-economic relations in the world. In this regard discussions
activated the reformation of currency dispensation. Thus they went out from
scientific circles and appeared in the spotlight of presidents and prime ministers of a
series of countries and international economic forums of "G20", system measures
sanctified to making on an exit from a global financial and economic crisis.
President of Russian Federation Medvedev D.A. suggested to conduct an
international conference on the problems of world currency-financial device 1"[4, p.
48] .
Coming forward on the IV th Economic forum in Astana , May 3, 20112,
President of the Republic of Kazakhstan Nursultan Nazarbayev accented the special
attention on three basic sectors: financial, industrially-innovative and resource-food
which stand before the world economy today .
The challenges of the financial sector consist in imperfectness of global
financial system and its basic component - world key currency. Exactly the existent
monetary-financial system, not answering principles of legality and democratic
character, weakens a height, distorts macroeconomic principles, mixes to work out
nascent global problems.
Imperfection of the world monetary system already force some countries to
undertake practical steps for the use of alternative currencies. In the end all
economies of the world will come to the necessity of creation and introduction of
supranational unit of account, and then and global currency of fundamentally new
class.
In this connection, he suggested to work out so-called "road map" on switching
to a new world currency. According to his opinion, the creation of new world key
currency will allow to range transparent clear to all global monetary-financial
system. And on the whole it will allow to fix the prospects of future economic
development. To Germany - from 82,6% to 75,0% Hungary - from 76,1% to 71,5%;
At the “G20” summit in November 2008, Washington and in april 2009 , London
From N.Nazarbayev’s speech on the IV th Economic forum in Astana , May 3, 2011. Komsomolskaya Pravda
(Kazakhstan), May 4, 2011.Countries are needed a pact on global regulation (Julia Nitchenko, Astana).
1
2
To Great Britain - from 80,7% in 2011 to 80,4% in 2016. [2, reference Book of
CIA 2011].
To Germany - from 82,6% to 75,0% Hungary - from 76,1% to 71,5%; To Great
Britain - from 80,7% in 2011 to 80,4% in 2016. [2, reference Book of CIA 2011].
Undeniable fact that it was the first Nursultan Nazarbayev undertook boldness
first from the politicians in the world scale, to show publicly the fundamental
injustice of current device of world finances to the world, moreover, showed
"impudence of responsibility" the persistent and successive appeals to the discussion
and joint search of fundamental ways of reformation world financial and economic
systems that undoubtedly will serve basis for fundamental reforms of world
economic device in behalf on more just, to the human and democratic model
[5,6,7,8,9].
It is impossible not to say and that today as never sharply before all humanity
the problem of social injustice in society, huge break of standard of living got up
between rich and poor people on t, he planet, the main vices of capitalism came to
light outside, to what the hearths of instability testify even in the developed countries
of the world.
Consequently, life requires changing the paradigm of economic development
objectively,
as humanity appeared not able to provide steady and forward economic development
of life on all planet. All more often in the economic system there are failures, socalled world financial and economic crises, thus they began to come more often, and
to embrace all planet, and the terms of their life became longer.
Exactly the decision of this superunique and most superdifficult problem, in our
opinion, all minds of humanity must today immediately engage and not only
politicians and scientists-economists but also all progressive humanity of the world.
Generally known, that world economic crises arise up first in financial sphere.
By guilt there are the so-called "financial bubbles" arising up as a result of forming
of risk fictitious capital during realization of various financial operations at the fund
market that, as a result for the counted minutes leading financial magnates operating
at this market can become the possessors of huge financial assets and incomes.
Unhealthy global trend is the fact that today many developed countries of the
world began to consume more than to produce material welfares, i.e. to live on credit
due to other countries of the world. The debt crisis hit many countries including
USA, Japan, Great Britain, Italy, Ireland, Spain, Portugal, Greece etc. The point is
that the fiscal deficits of these countries are easily covered by the produced
governments of these countries by bonds, that are for sale at the fund market and
bought by investors, both private and public, both internal and external. As a result
there is pumping of economy empty money that does not work on real economy, and
spin at the fund market, creating a fictitious capital and causing the crisis phenomena
in the economic system.
Undoubtedly, all these difficult economic phenomena are in the world, and
rendering the main direct influence on development of national economies of other
countries, including Russia and Kazakhstan, need deep comprehension and research,
in fact science always develops under influence of practical necessities of society
and for satisfaction of his certain needs.
The crisis phenomena always generate the different projects of reformation of
the world monetary system. For example, in the conditions of crisis of Bretton
Woods System the projects of creation of collective key currency came into question
stormily, producing of the common world currency provided with gold and
commodities, increase of role of gold in the international monetary system up to
renewal of gold standard [10,11].
Processes of globalizations require from Heads of the states and world financial
community of increase of efficiency of adjusting of the world monetary and
financial system at an international level, that will allow to minimize affecting of the
external crisis phenomena national economies, as they alone are not able to resist to
the massed external shocks.
In this regard, it is appropriate to the level of heads of 20 leading nations of the
world to implement a number of practical measures:
- to create the supranational body of the international adjusting of processes of
liberalization and internationalization of the national banking systems and providing
of financial help to the national economies for softening of negative consequences of
world financial and economic crisis;
- to work out the mechanisms of international control after motion of foreign
capitals, providing transparency of the banking systems of all countries, that means
the necessity of native reformation of all international currency-financial system;
- to work out the mechanisms of international control after motion of foreign
capitals, providing transparency of the banking systems of all countries, that means
the necessity of native reformation of all international currency-financial system;
- on the transitional stage to assume possibility of forming of new world and
regional financial and economic centers with the use of multicurrency standard;
- to consider possibility of development in the prospect of supranational currency for
providing of monetary-economic safety in the world.
It is impossible to ignore circumstance that today in the world really the
monetary items of three largest countries prevail: the USA(dollar), European
Union(euro) and China (yuan).
There are now also expanding the scope of international trade in yuan,
bypassing the U.S. dollar. In particular, South Korea, Indonesia, Malaysia, Thailand,
Argentina, Belarus, Russia, Kazakhstan, truck the currencies for a yuan without the
dollar converting.
In addition, every day at the internal monetary market of China of $400 million
interchange on yuan [12, c.2]. Therefore reformation of the world currency system
can not take place without active voice of China, as a yuan applies on the role of
regional key currency. In a prospect on the role of regional key currency the Russian
rouble applies within the framework of CIS countries.
Appearance in the triad of the Chinese yuan is perceived as a paradox: the
economy of country did not yet get status market, a yuan is not freely convertible
currency, it is not present in the basket of currencies of SDR, a country does not
adhere to principles of IMF, the structure of gold-value backlogs and monetary
policy of country do not adhere to principles of transparency. The indicated lacks of
this block are compensated by the Japanese yen answering all international standards
[13].
Not all perceive the real the ascent of the Chinese yuan on the top of pyramid of
the world monetary system. However with strengthening of position of China in the
world economy of change in a triad will appear inevitable. Asian block in
composition yuan - a yen will be rolled on the top of triangle, displacing an
euroblock downward. The basic premise of these changes: the growth rate of GDP
of China in crisis in 2008 amounted to 8% in sub-zero values of this index in almost
all countries, 10.4% - in 2010, 9.2% - in 2011, the IMF forecasts for 2012 and 2013,
the highest in China from all over the world, respectively: 8.2% and 8.8% [14].
It should be noted that Russian Federation accepts the most direct and active
participating in development of concrete suggestions for "Group 20" on providing of
stable world economy and prevention of crises of similar scale in the future. In their
number: development and acceptance of the internationally confessed standards in
the spheres of macroeconomic and budgetary policy, an observance of that would be
obligatory for leading world economies, including countries-issuers of key
currencies; stimulation of internal demand is in national economies, thus in
accordance with the tasks of providing of Medium to Long Term macroeconomic
stability, development and acceptance of international agreement determining the
global standards of adjusting and supervision in a financial sector; revision of role
and mandate of IMF in accordance with the new structure of the world currencyfinancial system, and also increase of resources and development of new credit
mechanisms IMF.
Key suggestions of Russia to the London summit of "Group 20"(April 2009)
were the following:
1. To provide the clear tying up of increase of resources IMF with his reforms
counted on 2-3;
2. To begin a discussion about key currencies (including taking into account the
prospect of introduction of supranational key currency);
3. To create more harmonious system of adjusting of financial markets (this
initiative pursues the aim of conclusion of international agreement determining the
global standards of adjusting and supervision in a financial sector) [15, c.36].
By the key mechanisms of practical realization of mark higher measures on
reformation of the world monetary system, in our view, can be following:
1. For introduction of supranational currency it is necessary to create a
supranational central bank the central jars of leading countries of the world (maybe,
large twenty) must become the members of that.
2. At the same time supranational central bank must use the accumulated
experience of operating technique of emission and functioning of international
currency units not only (SDR) special drawing rights (from 16 to 4 currencies) but
also ECU (12 currencies), and also experience of basket method of determination of
conditional cost of future supranational currency. In this case, the basket of
currencies, formative basis for the estimation of cost of SDR, must be extended due
to including of currencies of all leading countries, and GDP (gross domestic
product) also can be included as weight of currency. Distribution of special drawing
rights (SDR) can be carried from the system based only on settling, to the system,
provided with the real assets, such as backlogs, for the further increase of trust to the
market. Transmission of part of backlogs of countries-members in the centralized
management IMF, not only will promote possibilities of international association on
the settlement of crises and support of stability of the international monetaryfinancial system but also considerably will fix the role of special drawing rights
(SDR).
3. It is necessary to mean that experience of ECU was more attractive, than
SDR, as it was used by not only official but also private sector (by jars and
enterprises), that created pre-conditions for introduction of euro, therefore
expediently maximally to use the accumulated experience of operating technique of
emission of ECU for the just estimation of cost of future supranational currency.
Advantage of ECU consists yet and in that unlike by nothing not provided SDR, it
was provided with gold and dollars. And the central jars of countries-members of
the European currency system (EBC, 1979-1998гг.) were translated in an emission
center by 20% national gold backlogs.
Along with reformation of the world monetary system and creation in the
prospect of global currency, changes are needed in adjusting of the global
economic and financial systems.
Presently the recognition of the need to create a new architecture of the global
financial system is becoming more and more supporters among the leaders of the
largest states, businesses and, of course, in scientific circles. This situation, when
capital markets are being globalized, and a supervision and adjusting come true
mainly at national level, threatens the train of new crises and their converting into a
global system financial crisis.
Optimal architecture of the world financial system must answer at least to three
fundamental requirements:
1)not to hurt national sovereignty;
2)to provide adjusting and supervision after financial markets and smoothing
out of risks;
3)to do advantageous participating in operations on global financial markets.
Taking into account complication of simultaneous satisfaction of all three
requirements and being of acceptable compromise, participation of all groups of
countries and all subjects of economic and financial activity is needed in reformation
of the world financial system, as to the global challenges global answers must be
contrasted.
Reformation of the world financial system must envisage the mechanisms of
traffic of short-term capitals between countries and introduction regulation on them
tax on a risk capital, with that to shut out intumescing of external debt and crisis
caused by him.
To the countries, with the formed markets, prepossessing the vulnerable to
external shocks financial systems, it is important wider to use Chilean experience
accumulated at the beginning of 90th on inhibition of speculative short-term cash
inflow.
The mechanism of inhibition envisages the accumulation of obligatory interestfree reserves on one year under all volume of inflow of foreign facilities in country,
that does not conduce to the increase of size of physical capital, including foreign
credits, securities with the fixed income and facilities on the purchase of shares of
stock. The inflow of funds is subject to a kind of tax, ie is assigned a share of
imports into the country short of capital, which is subject to mandatory deposit on
non-interest bearing account for a period of one year. Reserve ratio may change as
improvement or deterioration of the situation with the stabilization of capital flows.
Initially, in 1991, subject to reservation in Chile accounted for 30%, and in June
1998 it was reduced to 10% and subsequently reduced to zero, although the principle
of reservation is not canceled at any time and can be restored.
Chile's experience has shown that this chart is effective enough and renders the
serious retentive affecting cash inflow by a term less one year. Principle of action of
this method consists in that it allows to decrease vulnerability of the financial system
of country in case of outflow of capital by limitation of some types of its inflow.
Countries get possibility to reduce dependence on the change of mood of foreign
portfolio investors, not coming running to direct prohibition of such investments.
For the decision of promissory problem of different countries the group of
industrial countries at the head with the International monetary fund may take a
more active role in the development of effective strategies to prevent debt crises. At
this IMF comes forward not only as a "creditor of the last instance", but in a greater
measure in a role of guarantor and co-ordinator of work on bringing in of private
capitals in countries needing financial inflowing.
In Strategy of providing of world financial stability in the conditions of
globalization, in our opinion, it is expedient to provide for the following mechanisms
for its implementation:
1. In the framework of the UNO it is important to accept the decision concerted
with the entire countries of the world, making agreement or accepting Memorandum
about creation of "Fund of financial stability of world economy" for the steady
functioning of new global key currency. We suppose that presently there is not a
necessity to create a new structure for the decision of global challenges and
problems, because United Nations are called in the scales of the whole world these
problems in the status to occupy exactly. In addition, IMF is the structure of the
UNO and already a few decades works out the indicated problems.
2. In creation of this Fund it is important to take part to all countries of the
world (about 200 countries of the world).
3. The amount of payments to the Fund may vary from 10 to 20% of the GDP
of a country. This is being addressed collectively by all countries of the world. Can
be taken and other decisions on this issue.
4. The poorest countries are important to reserve in Fund to 10% from GDP of
the country. Participating of poor countries in forming of this Fund is obligatory,
firstly, in order that poor countries felt the full-fledged members of world economy
and bore responsibility for effective functioning of the national economy and strictly
observed budgetary discipline and Standards of financial stability of world economy.
5. G20 countries are designed to take a more meaningful participation in
shaping the "Fund of financial stability of world economy". The size of their
withholdings can make to 20% from GDP, as the developed industrial countries get
most benefits from globalization. In crisis terms a size of such withholdings can be
less, than in periods of rapid development of world economy.
6. It is important also to envisage the mechanisms of participating in forming of
this Fund of large transnational companies (ТNC), transnational banks (ТNB), as
they get considerable incomes from the monopolistic activity in the conditions of
globalization and carry in too time most losses in case of offensive of world
financial crisis.
7. It is necessary also to envisage the mechanisms of voluntarily participation of
rich people in forming of this Fund of financial stability of world economy.
8. Side by side with this, it is expedient to work out the mechanisms of grant of
financial help from "Fund of financial stability of world economy" for ТNC and
ТNB and other private structures in case of origin for them financial cataclysms, as
these structures render substantial influence on the stable functioning of all world
economy and it is impossible to assume their crash.
9. On our exemplary settling, the supposed size of "Fund of financial stability
of world economy" can make about $ 6 - 12 trillion, if to take into account that
world GDP makes about $60 trillion. This Fund will serve as the family the "pillow
of safety" for a world economy and providing of the stable functioning of the new
world key currency created originally on the basis of multicurrency standard on
principle of special drawing rights (SDR) and ECU.
10. Modernized IMF can come forward the operator of this Fund, as he
possesses huge experience of adjusting and effective functioning of the world
currency system.
11. All system of forming, distribution and use of facilities of "Fund of
financial stability of world economy" must be exceptionally transparent.
12. All operations of Fund expediently every day to reflect on a web-site IMF.
13. IMF desirably quarterly to report before the heads of "large twenty" about
the state of motion of facilities of this Fund and operatively to accept decision on
providing of sponsorship of one or another country or regional integration
association (for example, ЕU (euro zones), EEU (again formed Eurasian economic
union), countries of the Pacific region, countries of BRIC, countries of Latin
America, African countries of and other of integration associations), as a stable
functioning of world economy depends on the effective functioning of these regional
educations.
14. All countries in the world are under an obligation strictly to observe
budgetary discipline and execute of the certain Standards of financial stability and
norm, worked out and accepted by countries "G20" and approved collectively by
the special decision of the UNO by the entire countries of the world.
15. IMF is necessary annually to report before the UNO and heads of entire
countries of the world (about 200 countries) about forming and use of facilities of
this Fund.
Along with these measures, Strategy of providing of world financial stability
in globalization supposes:
1. Increase the role of openness, to transparency and accounting of countries
and IMF for providing of stability of the world financial system.
2. Streamlining of standards, principles and substantive provisions, regulative
financially-bank practice. It is important to guarantee the application of
internationally recognized standards and "codes of good conduct", which include:
reporting standards, developed by the IMF's fiscal transparency code and a code of
transparency in monetary and fiscal policies, etc. The adoption of such standards in
the areas that are essential to ensure financial stability, will help raise awareness in
the provision of credit and investment decisions. In addition, the government will
pursue a more balanced policy, markets and private investors - more accurately
assess the risks and the country - to achieve higher macroeconomic indicators.
3. International estimation of degree of implementation by the separate
countries of standards and codes. Although implementation of standards carries
voluntarily character, an international association must know in what degree of
financial system of the countries correspond to the international confessed standards
and codes.
4. Engaging of private sector in permission of crisis problems, e.g.
participation of private creditors in providing stabilization of financing programs
supported by IMF, the financial responsibility of the solution to crisis must be spread
evenly between private and official structures. Such approach assists strengthening
of market discipline and the same to the increase of efficiency and stability of
international capital markets.
LITERATURE:
Financier, .№21, 2010, С.17.
Reference book of CIA 2011
Bulletin of the "Budgetary announcer", January 2012
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