Transnational governance in global finance - the principles for stable capital flows and fair debt restructuring in emerging markets

This paper analyses and assesses the track record and effectiveness of the so-called “Principles for Stable Capital Flows and Fair Debt Restructuring in Emerging Markets”,which have emerged as an important instrument for crisis prevention and crisis resolution in the international financial system. The paper argues that, notwithstanding their low profile, the Principles which were jointly agreed between sovereign debtors and their private creditors in 2004 have proved to be an effective instrument in spite of their voluntary and nonbinding nature. Indeed, an increasing number of sovereign debtors and private creditors have adopted the Principles’ recommendations on transparency and the timely flow of information, close dialogue, “good faith” actions and fair treatment. Two elements have been critical to the success of the Principles: (i) their specific design feature as a soft mode of governance agreed by a transnational public-private partnership and (ii) the “hardening” after their launch in terms of precision and delegation, thus moving them somewhat along the continuum of soft law and hard law towards the latter. The paper also makes the case that the Principles and their design features can provide some lessons for the current international policy debate on codes of conduct in global financial regulation.. JEL Classification: F34, F51, F53, G15, G18.Crisis prevention, debt restructuring, sovereign default, soft law, transnational public-private partnership, global financial governance.

Sudden Stops in Capital Inflows and the Design of Exchange Rate Regimes

A two sector small open economy model developed by Corden (1991, 2002) is used to analyse the impact of sudden stops in capital inflows on an internal and external equilibrium and to explore the merits of disposing of the nominal exchange rate as policy tool in rectifying real exchange rate misalignments. It is shown how the economy's sectoral demand properties determine the extent of recession associated with real exchange rate adjustment that is neither engineered by nominal exchange rate changes nor brought about by a decline in nontraded goods prices. The conclusion is drawn that, when deciding on the design of exchange rate regimes, the structural characteristics of the economy ought to be considered so as to appropriately strengthen its capacity to cope with shocks in the form of negative swings in capital inflows

Transnational governance in global finance - the principles for stable capital flows and fair debt restructuring in emerging markets

This paper analyses and assesses the track record and effectiveness of the so-called “Principles for Stable Capital Flows and Fair Debt Restructuring in Emerging Markets”,which have emerged as an important instrument for crisis prevention and crisis resolution in the international financial system. The paper argues that, notwithstanding their low profile, the Principles which were jointly agreed between sovereign debtors and their private creditors in 2004 have proved to be an effective instrument in spite of their voluntary and nonbinding nature. Indeed, an increasing number of sovereign debtors and private creditors have adopted the Principles’ recommendations on transparency and the timely flow of information, close dialogue, “good faith” actions and fair treatment. Two elements have been critical to the success of the Principles: (i) their specific design feature as a soft mode of governance agreed by a transnational public-private partnership and (ii) the “hardening” after their launch in terms of precision and delegation, thus moving them somewhat along the continuum of soft law and hard law towards the latter. The paper also makes the case that the Principles and their design features can provide some lessons for the current international policy debate on codes of conduct in global financial regulation.

Strengthening the Governance of the International Monetary Fund: How a Dual Board Structure Could Raise the Effectiveness and Legitimacy of a Key Global Institution

After having been at the helm of the international monetary system for decades, the International Monetary Fund was sidelined in policy debates in the past few years. One reason for the IMF not having taken a more central role in addressing key global policy issues in recent years relates to its internal governance. This paper focuses specifically on the structure and functioning of the Executive Board. The paper argues that Executive Board, although uniquely placed to provide authoritative guidance to IMF member countries, exert peer pressure and give economic policy advice, is overwhelmed by its tasks and responsibilities and too large to be an effective forum for true international economic dialogue. The paper makes the point that the highly diverse tasks of the IMF require different governance structures in order to be implemented effectively. We believe that the optimal number of governing bodies for the ongoing IMF work is not one, but that it is two, duly distinguishing between multilateral matters from country-related matters. Specifically, we propose to split the tasks that are predominantly systemic in nature from those that are predominantly country-focused and technical and believe that this can be done. Two different Boards would be dealing with these issues: a Systemic Issues Board and a Country Issues Board. The paper also discusses how such a dual board structure could be implemented in practice.IMF; Governance

The EU budget – how much scope for institutional reform?

This paper reviews current discussions on reforming the European Union (EU) budgetary procedure and assesses the main reform proposals that have been suggested thus far. It argues that prospects for reforms are presently hampered by the complex interplay between supranational and intergovernmental decision modes and the requirement of any budgetary procedure to strike a balance between efficiency and legitimacy. The paper reviews the main criticisms of the present budgetary procedure and the related reform proposals, which are assessed on the basis of relevant theoretical literature as well as brief comparisons with the federal budget of the United States. The paper argues that the current EU budgetary procedure maximises efficiency and legitimacy, given the present state of political integration in the EU. Significant modifications to the budgetary procedure would depart from that equilibrium.

The EU budget – how much scope for institutional reform?

This paper reviews current discussions on reforming the European Union (EU) budgetary procedure and assesses the main reform proposals that have been suggested thus far. It argues that prospects for reforms are presently hampered by the complex interplay between supranational and intergovernmental decision modes and the requirement of any budgetary procedure to strike a balance between efficiency and legitimacy. The paper reviews the main criticisms of the present budgetary procedure and the related reform proposals, which are assessed on the basis of relevant theoretical literature as well as brief comparisons with the federal budget of the United States. The paper argues that the current EU budgetary procedure matches by-and-large the current equilibrium between all actors involved, given the present state of political integration in the EU. Significant modifications to the budgetary procedure would depart from that equilibrium.European Union, EU budget, budget process

Exploring the cosmological dark matter coincidence using infrared fixed points

The asymmetric dark matter (ADM) paradigm is motivated by the apparent coincidence between the cosmological mass densities of visible and dark matter, $\Omega_\mathrm{DM} \simeq 5\Omega_\mathrm{VM}$. However, most ADM models only relate the number densities of visible and dark matter, and do not motivate the similarity in their particle masses. One exception is a framework introduced by Bai and Schwaller, where the dark matter is a confined state of a dark QCD-like gauge group, and the confinement scales of visible and dark QCD are related by a dynamical mechanism utilising infrared fixed points of the two gauge couplings. We build upon this framework by properly implementing the dependence of the results on the initial conditions for the gauge couplings in the UV. We then reassess the ability of this framework to naturally explain the cosmological mass density coincidence, and find a reduced number of viable models. We identify features of the viable models that allow them to naturally relate the masses of the dark baryon and the proton while also avoiding collider constraints on the new particle content introduced.Comment: 13 pages, 11 figures, 2 table

Implementing Asymmetric Dark Matter and Dark Electroweak Baryogenesis in a Mirror Two-Higgs-Doublet Model

Models of asymmetric dark matter (ADM) seek to explain the apparent coincidence between the present-day mass densities of visible and dark matter, \Omega_{\DM} \simeq 5\Omega_{\VM}. However, most ADM models only relate the number densities of visible and dark matter without motivating the similar particle masses. We expand upon a recent work that obtained a natural mass relationship in a mirror matter ADM model with two Higgs doublets in each sector, by looking to implement dark electroweak baryogenesis as the means of asymmetry generation. We explore two aspects of the mechanism: the nature of the dark electroweak phase transition, and the transfer of particle asymmetries between the sectors by the use of portal interactions. We find that both aspects can be implemented successfully for various regions of the parameter space. We also analyse one portal interaction -- the neutron portal -- in greater detail, in order to satisfy the observational constraints on dark radiation.Comment: 57 pages, 8 figure

Sudden Stops in Capital Inflows and the Design of Exchange Rate Regimes

Le Lay Etienne. Le port du Havre. Première partie . In: Études Normandes, livraison 18, n°62, 1er trimestre 1956. Le port du Havre. Première partie. pp. 105-144

The governance of the IMF: how a dual board structure could raise the effectiveness and legitimacy of a key global institution

The International Monetary Fund is currently engaged in a reform process to update its activities to the challenges of economic globalisation and establish it firmly as the central institution for international monetary cooperation. Yet, the current reforms may miss this aim because they do not foresee adjusting IMF governance so as to allow the Executive Board to become a forum for true international economic dialogue. Without such a change in governance, however, such economic dialogue is likely to continue moving outside the IMF, and spread in fora such as the G7, G20 or others that do not have universal status. This paper lays out a new proposal to adjust governance to make the IMF more effective in this area. It proposes to create a new smaller Board to deal with global economic issues of a systemic nature, and enlarge the current Board to make more room for developing countries, focusing it on country-related and technical matters, including bilateral surveillance and structural adjustment lending. The implementation of a dual Board structure is obviously challenging from an institutional point of view, and the paper discusses these challenges in detail. Yet, it would allow the IMF to be more effective and carry greater legitimacy vis-à-vis developing economies and at the same time play a more central role in international economic consultation and cooperation that in recent years has increasingly drifted towards the G-groups such as the G7, G20, G24 and other fora