This automated
translation of the original message in French has been
revised only to correct the mistranslations.
This text is also available in French.
(Synthesis by Olivier CASSARD)
International meeting, Geneva March 30-31, 2001
Moderator:
Mr. Reinaldo GONCALVES
The reform of the international financial
system issue became imperative these last years but more especially after the
Asian financial crisis. The economic literature gets along enough extensively
on the report of the multiplication of the financial crises these last two
decades, their deep impact on the economies of poor countries and the impotence
of the international financial institutions to warn and to manage these crises
in an optimal manner.
If this report is the convergence of
a general recognition, it doesn't go in the same way for the solutions or
propositions in order to remedy the imperfections and instabilities of the
financial markets. To this subject, we can note that these are not the means
nor the ideas that miss to intervene but rather a political consensus. Indeed,
the essential of the dominant speech is about the internal reasons of these
crises and propose solutions centered on the backing of the domestic financial
systems of the countries conductors of funds. The objective is to improve the
macroeconomic and financial policies of these countries through the setting up
of successive processes of financial liberalization and backing of the controls
and supervision of the domestic financial institutions. However, keeping silent
on the external dimensions of the problematic, as the regulation of the
international fluxes of funds for example, the incoherence of the situation
makes emerging countries carry the burden and the responsibility of a possible
improvement of the balance of the international financial system (Andrew
Cornford).
The actual balance of power leans
extensively in favor of the G-7. In this perspective, the international
financial stability holds the construction of a myth and it doesn't correspond
to a world common good. Indeed, the interests of the various actors
(populations, governments, investors…) are necessarily divergent and the
national interest prevails on the international interest. Besides, some
emerging countries fear that a surplus of regulation and control of the capital
movements could restrict their liquidity. These observations bring to
understand more comfortably why the opposition to progress reigns in the world
decisional high spheres. On the one hand, the emerging countries fear a strong
reduction of the capital influx of which they need to develop themselves and on
the other hand, the opposition to change is politically rational in the
viewpoint of the big economic powers for numerous reasons of which most obvious
seems to be the lightweight effect of the international financial crises on
their national economy (Jacques Généreux).
However, as we had notice
previously, some interesting propositions exist. We can define three domains of
action: the prevention of the financial crises, the management of the crises
and the reform of the international financial institutions, in particular of
the IMF (Jacques Généreux).
To warn the crises better, it is
necessary to establish:
·
a
certain number of prudential norms and rules of external and internal
surveillances in the countries conductors of funds but also in the capital
exporting countries,
·
a
repartitioning of the financial activities. This one could be useful in
countries where the processes of financial liberalization was implanted in a
fast and precipitate way.
To manage the crises better, it is
necessary:
·
to
reverse the usual tendency that wants to socialize the losses of the financial
crises (plane of adjustment essentially supported by the populations) and that
wants to privatize the earnings (support of the public authorities to the
financial institutions deprived in difficulty),
·
to
make intervene the private sector (syndicate of banks) to maintain the credit
lines, to guarantee the liquidity.
As for the reform of the
international financial institutions:
·
a
redefinition of the role of the IMF is urgent. His present mandate doesn't
allow him to answer the contemporary problems of the international financial
system efficiently. The imposed remedies (conditionality) seem to go sometimes
in opposition to the common sense and makes worse some situations already
catastrophic (Asian crisis),
·
is
also necessary a better representation of the countries, notably in the controlling
organs of these institutions,
·
a true
decentralization to make the policies more appropriated to the different
national features of the countries (Jacques Generous).
However, the political logic doesn't
plead in favor of such changes. Therefore, will it be necessary to wait for a
serious financial crisis to see the first transformations?