From creation to consolidation: a novel framework for memory processing

Long after playing squash, your brain continues to process the events that occurred during the game, thereby improving your game, and more generally, enhancing adaptive behavior. Understanding these mysterious processes may require novel theories

The International Monetary Fund and Regulatory Challenges

The International Monetary Fund (IMF) plays a substantial regulatory role in the international monetary and financial system. The IMF has been assigned a formal regulatory role in a limited number of areas such as obligations covering exchange rate policies. The Fund has a broader informal regulatory role derived from the voluntary consent of its members such as in surveillance over members’ financial sector policies and international payments imbalances. The IMF’s regulatory role is unlike that of its member governments within their own jurisdictions. The Fund’s formal and informal regulation must be constantly nurtured and renewed via peer-review processes.IMF, Articles of Agreement, regulation, Special Data Dissemination Standard (SDDS), General Data Dissemination System (GDDS), Bretton Woods, WTO, special drawing rights (SDR)

G-20 Reforms of the International Monetary System: An Evaluation

At the recent Cannes G-20 summit, the international monetary system (IMS) reform agenda, along with a number of other important issues, was hijacked by the European crisis. Nevertheless, the G-20 countries and various international institutions conducted an intensive process of review and discussion of the IMS via conferences, working groups, and reports. A year ago French President Sarkozy and other French government officials set the agenda for IMS reform to include five elements: surveillance of the global economy and financial system, the international lender-of-last-resort mechanisms (global financial safety nets), the management of global capital flows, reserve assets and reserve currencies, and IMS governance. Little progress was made on most of these topics. On surveillance there was only one surprise in the form of commitments by a few countries to allow their automatic stabilizers to operate in the current slowdown; on the lender-of-last-resort issues, there will only be marginal steps forward; and on the management of capital flows, the progress that has been achieved over the past several years has been loosely codified, which is a substantive achievement. Overall, the G-20 summit at Cannes resulted in some useful mutual education but not much in terms of concrete accomplishments.

Sovereign Wealth Funds: Threat or Salvation?

This study examines the role of sovereign wealth funds (SWFs) in the global economy and financial system. Sovereign wealth funds are not a new phenomenon in international finance. Governments of a few countries have used similar entities to manage their international financial assets for several decades. Moreover, countries have always held international reserves, and government-owned entities have made cross-border investments for many years. Sovereign wealth funds or their equivalent pose profound issues for the countries that own them with respect to macroeconomic policy and the potential for corruption. They also raise issues for countries that receive SWF investments as well as for the international financial system as a whole because government ownership introduces potential political and economic power issues into the management of these cross-border assets. This study traces the origins of SWFs. It describes the issues raised by these large governmental holdings of cross-border assets for the countries that own them, for the host countries, and for the international financial system. The study lays out what is known about the 50-plus SWFs of various countries. Some countries have more than one such entity, and a sample of government-managed pension funds is included in this analysis because they raise most of the same basic policy issues. Using publicly available information that is provided on a systematic basis, the author has previously developed a "scoreboard" for these funds involving a number of elements grouped in four categories: structure, governance, transparency and accountability, and behavioral rules. The 2008 edition contributed to the development of a set of generally accepted principles and practices, the Santiago Principles, for SWFs by the International Working Group operating under the auspices of the International Monetary Fund. This publication presents an updated scoreboard for an expanded list of funds, evaluates the Santiago Principles, and examines current compliance with those principles. The study also examines the policies of recipient countries and the role of the Organization for Economic Cooperation and Development (OECD) investment codes. Finally, the study discusses the evolving role of SWFs in the context of the global economic and financial crisis and its aftermath and will make recommendations for the policies of countries both managing such funds and those that expect to receive investments from them in the future.

Asian Regional Policy Coordination

This paper addresses two central questions for Asia and the world: (1) What is the purpose of Asian regional policy coordination going forward? (2) Will Asian regional policy coordination substitute or complement global policy coordination? The paper examines the potential coverage and content of such policy coordination, what is meant by Asia in this context, and how Asia fits in with global policy coordination processes. I address three related aspects of Asian regional policy coordination: macroeconomic policies, reserve management, and crisis management. I conclude that while the countries in the Asian region have not completely exploited the scope for regional policy coordination, more ambitious efforts focused on close integration are not likely to bear fruit, in particular, if they are conceived and promoted under the banner of Asian exceptionalism. These conclusions are based on two main considerations: First, Asian economies differ, and will continue to differ, sufficiently in size and stage of development such that it is difficult to conceive of a successful voluntary blending of their interests. Second, the central lesson of the global financial crisis and its current European coda is that global economic and financial integration has advanced sufficiently that countries can run but they cannot hide individually or in sub-global groups of countries.Asia, Emerging Asia, Regional Arrangements, International Monetary Fund, Group of Twenty (G-20), Global Financial Safety Net, Special Drawing Rights, Chiang Mai Initiative, Chiang Mai Initiative Multilateralized, Current Account Adjustment, Exchange Rates

Sovereign Wealth Funds: The Need for Greater Transparency and Accountability

Management of official holdings of foreign assets, in particular in sovereign wealth funds, has become a major focus of national and international economic and financial policy. The principal reasons are their size, lack of transparency, potential to disrupt financial markets, and the risk that political objectives might influence their management. Moreover, such large cross-border holdings in official hands are at sharp variance with today's market-based global economy and financial system. These investment activities of governments have become sufficiently significant that an internationally agreed standard should be established to guide these activities. The standard should apply to the gamut of international investments of governments, including traditional foreign exchange reserves, stabilization funds, nonrenewable resource funds, sovereign wealth funds, and government-owned or controlled entities such as pension funds. The standard should ensure that international investments of governments are based on clearly stated policy objectives and investment strategies. It should set out the role of the government and the managers of the investment mechanism/entity and ensure that the operations of the investment mechanisms are as transparent as possible. Depending on the type of mechanism, its size, and the scope of its activities, behavioral guidelines with respect to its management should be established. Such a standard would contribute not only to financial stability in the countries directly involved but also to international financial stability by increasing the transparency, accountability, and predictability of the operations of governments in managing their international investments and discharging their obligations to current and future generations.

The G-20 and International Financial Institution Governance

This paper addresses the agenda for the Group of Twenty (G-20) leaders' meeting in Seoul, Korea in November 2010. This is an opportunity and challenge for Asian leaders in particular. Their test will be, first, to demonstrate that they can responsibly advance economic recovery. They must also deliver on institutional reform, in particular of the International Monetary Fund (IMF). Author Edwin M. Truman advocates a substantial expansion of the IMF's role as lender of last resort that is integrated with the surveillance role of the IMF in the form of comprehensive prequalification for IMF assistance and policy advice and a substantial increase in the IMF's financial resources. Truman also propose an approach to meaningful reform of the distribution of IMF quotas along with limiting European seats on the IMF executive board.International Monetary Fund, Group of Twenty G20, China, Korea, Asia, special drawing rights, economic growth, exchange rates

On What Terms Is the IMF Worth Funding?

In the first decade of the 21st century the International Monetary Fund (IMF) faced crises of legitimacy, relevance, and budgetary finance. It now confronts what likely will be the worst global recession since World War II, potentially huge demands for its financial assistance with limited resources, and calls for it to play a more central role in the international financial and regulatory systems. At the same time, the incoming Barack Obama administration must decide what to do about the modest package of IMF reforms that was completed in the spring of 2008. The package requires US congressional approval to go into effect. This paper reviews the recent, slow progress on IMF reform and makes recommendations to the Obama administration against the background of that record, the emerging global recession, and continuing financial turmoil. I recommend that the IMF package be reopened to include a doubling of IMF quotas and an amendment that will permit the Fund to swap special drawing rights (SDR) with major central banks to finance its short-term lending facility. I also recommend a special allocation of 50 billion SDR. If these proposals are turned down by the G- 20 at its meeting in April 2009, I reluctantly recommend that the Obama administration seek congressional approval of the IMF package as it now stands because a failure to do so would seriously undermine the Fund as a central multilateral institution.International Monetary Fund, current account adjustment, exchange rates, financial turbulence, global recession, financial supervision and regulation

Off-line processing: reciprocal interactions between declarative and procedural memories

The acquisition of declarative (i.e., facts) and procedural (i.e., skills) memories may be supported by independent systems. This same organization may exist, after memory acquisition, when memories are processed off-line during consolidation. Alternatively, memory consolidation may be supported by interactive systems. This latter interactive organization predicts interference between declarative and procedural memories. Here, we show that procedural consolidation, expressed as an off-line motor skill improvement, can be blocked by declarative learning over wake, but not over a night of sleep. The extent of the blockade on procedural consolidation was correlated to participants' declarative word recall. Similarly, in another experiment, the reciprocal relationship was found: declarative consolidation was blocked by procedural learning over wake, but not over a night of sleep. The decrease in declarative recall was correlated to participants' procedural learning. These results challenge the concept of fixed independent memory systems; instead, they suggest a dynamic relationship, modulated by when consolidation takes place, allowing at times for a reciprocal interaction between memory systems