The History of the SDR
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CEMLA, a Key Institution in Latin America 60º Anniversary
CEMLA, A Key Institution in Latin America 60º anniversary CENTER FOR LATIN AMERICAN MONETARY STUDIES cemla: A Key Institution in Latin America, 1952-2012 CEMLA: A Key Institution in Latin America, 1952-2012 Eduardo Turrent Díaz CEMLA: A Key Institution in Latin America, 1952-2012 First edition, 2015 Centro de Estudios Monetarios Latinoamericanos (cemla) Durango 54, colonia Roma Norte, Delegación Cuauhtémoc C.P. 06700, México D. F., México <www.cemla.org> Copyright© 2015 Centro de Estudios Monetarios Latinoamericanos All rights reserved Printed in Mexico isbn 978-607-7734-64-2 Any copy or reproduction, retransmission, or re-diffusion, total or partially and through any media, of the content of this book is completely forbidden without previous written authorization form cemla. Editorial and translations coordination by the Information Services Management, cemla. Cover photography: © Dave Bredeson | dreamstime.com vi Table of Contents Preface ........................................................................................ xi Introduction ........................................................................ 1 Chapter I. Antecedents and Establishment (1952) .......... 15 1. Beginnings .......................... ....................................... 15 2. The Project ................................................................. 24 Chapter II. Takeoff (1952-1960) ........................................... 41 1. Overview .................................... ................................. 41 2. Training ....................................... -
Eurocurrency Contracts
RS - IV-5 Eurocurrency Contracts Futures Contracts, FRAs, & Options Eurocurrency Futures • Eurocurrency time deposit Euro-zzz: The currency of denomination of the zzz instrument is not the official currency of the country where the zzz instrument is traded. Example: Euro-deposit (zzz = a deposit) A Mexican firm deposits USD in a Mexican bank. This deposit qualifies as a Eurodollar deposit. ¶ The interest rate paid on Eurocurrency deposits is called LIBOR. Eurodeposits tend to be short-term: 1 or 7 days; or 1, 3, or 6 months. 1 RS - IV-5 Typical Eurodeposit instruments: Time deposit: Non-negotiable, registered instrument. Certificate of deposit: Negotiable and often bearer. Note I: Eurocurrency deposits are direct obligations of commercial banks accepting the deposits and are not guaranteed by any government. They are low-risk investments, but Eurodollar deposits are not risk-free. Note II: Eurocurrency deposits play a major role in the international capital market. They serve as a benchmark interest rate for corporate funding. • Eurocurrency time deposits are the underlying asset in Eurodollar currency futures. • Eurocurrency futures contract A Eurocurrency futures contract calls for the delivery of a 3-mo Eurocurrency time USD 1M deposit at a given interest rate (LIBOR). Similar to any other futures a trader can go long (a promise to make a future 3-mo deposit) or short (a promise to take a future 3-mo. loan). With Eurocurrency futures, a trader can go: - Long: Assuring a yield for a future USD 1M 3-mo deposit - Short: Assuring a borrowing rate for a future USD 1M 3-mo loan. -
The European Bank for Reconstruction and Development and the Post-Cold War Era
ARTICLES THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE POST-COLD WAR ERA JoHN LINARELLi* 1. INTRODUCTION The end of the Cold War has brought many new challen- ges to the world. Yet, the post-Cold War era possesses a few characteristics which are strangely reminiscent of times preceding World War II. Prior to World War I1, and before the rise of communism in Central and Eastern Europe, the West was viewed as a potential source of the means for modernization and technological progress.1 Cooperation with the West was an important part of the economic policies of Peter the Great as well as Lenin.2 "Look to the West" policies were also followed in Japan, during the Meiji era, and were attempted by late 19th century Qing dynastic rulers and the Republican government in China.3 The purely political and economic characteristics of the West, * Partner, Braverman & Linarelli; Adjunct Professor, Georgetown University Law Center and the Catholic University Columbus School of Law. I find myself in the habit of thanking Peter Fox, Partner, Mallesons Stephen Jaques and Adjunct Professor, Georgetown University Law Center, for his encouragement and guidance. His insights have proven invaluable. See Kazimierz Grzybowski, The Council for Mutual Economic Assistance and the European Community, 84 AM. J. IN'L L. 284, 284 (1990). 2See id. 3 See James V. Feinerman, Japanese Success, Chinese Failure: Law and Development in the Nineteenth Century (unpublished manuscript, on file with the author). (373) Published by Penn Law: Legal Scholarship Repository, 2014 374 U. Pa. J. Int'l Bus. L. [Vol. -
History of the International Monetary System and Its Potential Reformulation
University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange Supervised Undergraduate Student Research Chancellor’s Honors Program Projects and Creative Work 5-2010 History of the international monetary system and its potential reformulation Catherine Ardra Karczmarczyk University of Tennessee, [email protected] Follow this and additional works at: https://trace.tennessee.edu/utk_chanhonoproj Part of the Economic History Commons, Economic Policy Commons, and the Political Economy Commons Recommended Citation Karczmarczyk, Catherine Ardra, "History of the international monetary system and its potential reformulation" (2010). Chancellor’s Honors Program Projects. https://trace.tennessee.edu/utk_chanhonoproj/1341 This Dissertation/Thesis is brought to you for free and open access by the Supervised Undergraduate Student Research and Creative Work at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Chancellor’s Honors Program Projects by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact [email protected]. History of the International Monetary System and its Potential Reformulation Catherine A. Karczmarczyk Honors Thesis Project Dr. Anthony Nownes and Dr. Anne Mayhew 02 May 2010 Karczmarczyk 2 HISTORY OF THE INTERNATIONAL MONETARY SYSTEM AND ITS POTENTIAL REFORMATION Introduction The year 1252 marked the minting of the very first gold coin in Western Europe since Roman times. Since this landmark, the international monetary system has evolved and transformed itself into the modern system that we use today. The modern system has its roots beginning in the 19th century. In this thesis I explore four main ideas related to this history. First is the evolution of the international monetary system. -
Foreign Exchange Markets and Exchange Rates
Salvatore c14.tex V2 - 10/18/2012 1:15 P.M. Page 423 Foreign Exchange Markets chapter and Exchange Rates LEARNING GOALS: After reading this chapter, you should be able to: • Understand the meaning and functions of the foreign exchange market • Know what the spot, forward, cross, and effective exchange rates are • Understand the meaning of foreign exchange risks, hedging, speculation, and interest arbitrage 14.1 Introduction The foreign exchange market is the market in which individuals, firms, and banks buy and sell foreign currencies or foreign exchange. The foreign exchange market for any currency—say, the U.S. dollar—is comprised of all the locations (such as London, Paris, Zurich, Frankfurt, Singapore, Hong Kong, Tokyo, and New York) where dollars are bought and sold for other currencies. These different monetary centers are connected electronically and are in constant contact with one another, thus forming a single international foreign exchange market. Section 14.2 examines the functions of foreign exchange markets. Section 14.3 defines foreign exchange rates and arbitrage, and examines the relationship between the exchange rate and the nation’s balance of payments. Section 14.4 defines spot and forward rates and discusses foreign exchange swaps, futures, and options. Section 14.5 then deals with foreign exchange risks, hedging, and spec- ulation. Section 14.6 examines uncovered and covered interest arbitrage, as well as the efficiency of the foreign exchange market. Finally, Section 14.7 deals with the Eurocurrency, Eurobond, and Euronote markets. In the appendix, we derive the formula for the precise calculation of the covered interest arbitrage margin. -
Reforming the International Monetary System: from Roosevelt to Reagan
DOCUMENT RESUME ED 384 560 SO 025 006 AUTHOR Hormats, Robert D. TITLE Reforming the International Monetary System: From Roosevelt to Reagan. Headline Series No. 281. INSTITUTION Foreign Policy Association, New York, N.Y. REPORT NO ISBN-0-87124-113-7; ISSN-0017-8780 PUB DATE Jun 87 NOTE 84p. AVAILABLE FROM Foreign Policy Association, 729 Seventh Avenue, New fork, NY 10019 ($5.95). PUB TYPE Books (010) Guides Non-Classroom Use (055) EDRS PRICE MF01/PC04 Plus Postage. DESCRIPTORS Banking; Economic Change; Economics; *Finance Reform; Financial Policy; Financial Problems; *Foreign Policy; Higher Education; International Cooperation; *International Organizations; International Programs; *International Relations; International Studies; *International Trade; *Monetary Systems; Money Management; Secondary Education IDENTIFIERS *International Monetary Fund; Reagan (Ronald); Roosevelt (Franklin D) ABSTRACT This book examines the changed, and .anging, international monetary system.It describes how the system has evolved under nine Presidents, from Franklin D. Roosevelt to Ronald Reagan. It also discusses the broader evolution of the world economy during this period, including the trade and investment issues to which international monetary policy is closely linked. The subjects are predominantly international but have a major impact on domestic economies. These international effects are why they should be of concern to most people. The dollar is viewed as both a national and an international money. The International Monetary Fund (IMF)is viewed as -
The Per Jacobsson Lectures
The Per Jacobsson Lectures 2012 Society, Economic Policies, and the Financial Sector. Lecture by Y. V. Reddy. 2011 The IMF and the International Monetary System: Lessons from the Crisis. Lecture by Axel Weber. What Financial System for the Twenty-First Century? Lecture by Andrew Crockett. 2010 Navigating the New Normal in Industrial Countries. Lecture by Mohamed A. El-Erian. Markets and Government Before, During, and After the 2007–20XX Crisis. Lecture by Tommaso Padoa-Schioppa. 2009 Growth After the Storm? A Longer-Run Perspective. Lecture by Kemal Dervis¸. 2008 The Role and Governance of the IMF: Further Reflections on Reform. Symposium panelists: Stanley Fischer, Trevor Manuel, Jean Pisani-Ferry, and Raghuram Rajan. The Approach to Macroeconomic Management: How It Has Evolved. Lecture by Lord George. 2007 Balance of Payments Imbalances. Lecture by Alan Greenspan. 2006 Asian Monetary Integration: Will It Ever Happen? Lecture by Tharman Shanmugaratnam (Singapore). Competition Policy and Monetary Policy: A Comparative Perspective. Lecture by Mario Monti (Bern). 2005 International Financial Institutions: Dealing with New Global Challenges. Lecture by Michel Camdessus. 2004 The U.S. Current Account Deficit and the Global Economy. Lecture by Lawrence H. Summers. Some New Directions for Financial Stability? Lecture by C.A.E. Goodhart, CBE (Zurich). 2003 The Arab World: Performance and Prospects. Lecture by Abdlatif Yousef Al-Hamad (Dubai). 2002 The Boom-Bust Capital Spending Cycle in the United States: Lessons Learned. Lecture by E. Gerald Corrigan. Recent Emerging Market Crises: What Have We Learned? Lecture by Guillermo Ortiz (Basel). 2001 No lecture took place due to the cancellation of the Annual Meetings of the IMF and the World Bank. -
Stanley Fischer Trevor Manuel Biographies
Biographies Stanley Fischer Stanley Fischer has been Governor of the Bank of Israel since May 2005. For more than three years before that, he was Vice-Chairman of Citigroup. Mr. Fischer was the First Deputy Managing Director of the IMF from September 1994 through August 2001. Before he joined the IMF, he was Professor of Economics at MIT. He was Chief Econo- mist at the World Bank during 1988–90. Trevor Manuel Trevor Manuel has been South Africa’s Minister of Finance since 1996. Before becoming Finance Minister, he was for two years South Africa’s Minister of Trade and Industry. He served as Chairman of the Development Committee (the Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries) from November 2001 to September 2005. 28 ©International Monetary Fund. Not for Redistribution BIOGRAPHIES 29 Jean Pisani-Ferry Jean Pisani-Ferry has been Director of the Brussels-based think tank Bruegel since 2005. He is also a Professor of Economics at the University of Paris–Dauphine and a member of the French Prime Minister’s Council of Economic Analysis. From 1992 to 1997 he was the director of the Centre d’études prospectives et d’informations internationales (CEPII, the French Research Center in International Economics). Raghuram Rajan Raghuram Rajan has been Professor of Finance at the University of Chicago’s Graduate School of Business since 1995, although he took a leave of absence during 2003–06 to be Economic Counsel- lor and Director of the Research Department at the IMF. -
The Eurozone Debt Crisis and the European Banking Union: "Hard Choices," "Intolerable Dilemmas," and the Question of Sovereignty
THE INTERNATIONAL LAWYER A TRIANNUAL PUBLICATION OF THE ABA/SECTION OF INTERNATIONAL LAW The Eurozone Debt Crisis and the European Banking Union: "Hard Choices," "Intolerable Dilemmas," and the Question of Sovereignty EMILlos AVGOULEAS* AND DOUGLAS W. ARNER** I. Introduction*** The 2008 global financial crisis spread to most of the developed economies, including those of the European Union. Unfortunately, despite decades of effort to build a Single Financial Market, almost all EU jurisdictions lacked proper crisis resolution mechanisms, especially with respect to the cross-border dimensions of a global crisis.' This led to a threat of widespread bank failures in EU countries and near collapse of their financial systems. Today, in the wake of the Eurozone financial crisis and the recent Brexit vote, the EU is at a critical crossroads. It has to decide whether the road to recovery runs through closer integration of financial policies to follow recent centralization of bank supervision and resolution in the European Banking Union (EBU) or whether to take the path of fragmentation with a gradual return to controlled forms of protectionism in the pursuit of narrow national interest, although the latter is bound to endanger the single market. Therefore, the policy dilemmas facing the EU and contemporary institution building within the Eurozone provide a key window into the future of both global and regional financial integration. The complexity of the financial integration process and its significance means that it is impossible to understand contemporary developments within the EU leading up to the EBU without a discussion of the different forms of * Chair in International Banking Law and Finance, University of Edinburgh and Member of the European Banking Authority Stakeholder Group. -
A Brief History of the International Monetary System Since Bretton Woods
WIDER Working Paper 2016/97 A brief history of the international monetary system since Bretton Woods José Antonio Ocampo* September 2016 Abstract: This paper provides a historical background to contemporary debates on the international monetary system: their genesis, similarities, and differences of problems it has faced at different times. It looks sequentially at the design of the Bretton Woods system; the tensions it faced since the 1960s and its collapse in the early 1970s; the management of the collapse, the failure to agree on a new system, and the resulting non-system that followed; the maturing of these ad hoc arrangements, and the reforms after the North Atlantic financial crisis and debates on how to build up a broader global ‘financial safety net’. Keywords: Bretton Woods agreement, gold reserves, foreign exchange reserves, exchange rate system, payments imbalances, IMF credit lines JEL classification: F02, F31, F33, F34, F42 Acknowledgements: This is the initial chapter of a book on the international monetary system prepared for the United Nations University World Institute for Development Economics Research. I am grateful to Andrés Lizcano for incomparable research assistance. * School of International and Public Affairs; Committee on Global Thought; and Initiative for Policy Dialogue, Columbia University; [email protected]. This study has been prepared within the UNU-WIDER project on ‘Macro-Economic Management (M-EM)’. Copyright © UNU-WIDER 2016 Information and requests: [email protected] ISSN 1798-7237 ISBN 978-92-9256-141-3 Typescript prepared by Ayesha Chari. The United Nations University World Institute for Development Economics Research provides economic analysis and policy advice with the aim of promoting sustainable and equitable development. -
Report on the Evaluation of the Role of the IMF in Argentina, 1991–2001, June 30, 2004
INTERNATIONAL MONETARY FUND INDEPENDENT EVALUATION OFFICE REPORT ON THE EVALUATION OF THE ROLE OF THE IMF IN ARGENTINA, 1991–20011 June 30, 2004 1 This report was prepared by a team headed by Shinji Takagi and including Benjamin Cohen, Isabelle Mateos y Lago, Misa Takebe and Ricardo Martin, and was approved by Montek S. Ahluwalia, Director of the Independent Evaluation Office (IEO). The report has benefited from contributions from Nouriel Roubini and Miguel Broda. The final judgments are the responsibility of the IEO alone. Research assistance and logistical support from Nicolas Arregui is gratefully acknowledged. report.DOC July 28, 2004 (9:38 AM) - 2 - Contents Page Abbreviations and Acronyms ....................................................................................................5 Executive Summary...................................................................................................................6 I. Introduction.....................................................................................................................13 A. Overview of Economic Developments, 1991–2001 ..............................................16 B. Factors Contributing to the Crisis..........................................................................21 II. Surveillance and Program Design, 1991–2000...............................................................27 A. Exchange Rate Policy ............................................................................................27 B. Fiscal Policy...........................................................................................................37 -
On the Pervasive Effects of Federal Reserve Settlement Regulations
On the Pervasive Effects of Federal Reserve Settlement Regulations Ken B. Cyree, Mark D. Griffiths, and Drew B. Winters he purpose of this paper is to determine Since implementation of the Monetary Control whether Federal Reserve settlement effects Act in 1980, most depository institutions in the United States have been subject to the Federal have also appeared in the overnight London T Reserve’s statutory reserve requirements. These interbank offer rate (LIBOR) since the Federal requirements establish the percentage of each lia- Reserve removed the reserve requirements on 1 bility category for which a bank must maintain Eurocurrency liabilities. We begin by explaining reserves, either as vault cash or as deposits in the why this is an important issue and by describing bank’s Federal Reserve account.2 (See the boxed the characteristics of these settlement effects. insert: “The Federal Reserve’s Statutory Reserve The primary reason to examine this change in Requirements.”) A settlement effect, referred to reserve requirements is to determine the reach of above, is a regular pattern of interest rate changes U.S. Federal Reserve regulatory changes. Markets associated with the days that banks must settle their are becoming increasingly global and, accordingly, reserve accounts with the Fed. Under rules in place large bank operations are becoming increasingly since February 1984, the primary reserve manage- global. Finding a settlement effect in LIBOR would ment process calls for a biweekly settlement of suggest that banks receiving U.S. deposits actively reserve accounts.3 This two-week cycle is known as use the London interbank loan market to manage the reserve maintenance period, which begins on a their domestic reserve accounts.