Paper Topic:

Discuss the arguments for and against the reform of the international financial (monetary) system.

Running Head : International Monitory System

Arguments For and Against the Reform of the International Financial (Monetary ) System

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Arguments For and Against the Reform of the International Financial (Monetary ) System

Introduction

The role of international financial system is always considered very crucial in the scenario of global finance markets (Jean Tirole , p128 2002 . There have always been different opinions of the economic experts about strengthening the role of the international financial system aligned with the emerging trends of global market and to provide balance

of adjustments and finance to different developed and developing countries of the world so that the financial integration could contribute towards the economic stability of the countries . The financial crisis wave in 1990s further added to the appetite of reforming the international monitory system as its role remained very controversial during different financial crisis . The financial crisis faced by Mexico , Thailand , Korea , Indonesia , Russia and Brazil during the time period of 1994 to 1999 gave birth to many questions and concerns regarding the role of international monitory system and debates over the need of the policies of international financial system were also accelerated when the world witnesses the setbacks of these financial crisis (Stanley Fischer , p1 , 2002 . There are many reforms and supportive programs and policies formulated and enacted by IMF and these policies and programs also draw different impacts of the economies of the different countries . These reforms are an important of discussion for the experts all over the world and the financial experts use to give different arguments in the favor and against of the reforms of the international financial system . This is aimed at discussing the opinions and arguments held by different experts in the perspective of reforms of international financial system . In this regard the describes the context that gave birth to the need of the reforms in the international financial system and then discusses some arguments in the favor and against these reforms

The Context of Reforms in International Financial System

The financial crisis raised during the 1990s draw some major impacts on the world economy . Though Asian countries were the main receivers of these impacts however the economic experts believe that the entire global witnessed the impact of these financial crises (Jean Tirole p128 , 2002 . These crises started a long debate over the role of International Monitory fund and experts started arguing that there is great need of improving the IMF programs through the reforms in its policies . The trend of capital flow to the emerging markets created the situation of global capitalism crisis and the need of reforming the International financial was realized with more intensity after the crisis that began with ERM - European Rate Mechanism crisis of 1992-93 and the tequila crisis of 1994-95 . In the same decade the world economy witnessed some more financial crisis in forms of Asian , Russian Brazilian crises and LTCM (Stanley Fischer , p1 , 2002

After facing the set backs of these financial crisis the economies...

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