An Institutional Approach to Balancing International Monetary Relations : The Case for a US-China Settlement Facility

Management of international monetary relations between China and the United States will be one of the crucial parameters for the stability or instability of the global financial system in the next decade. Although most of the literature suggests rebalancing through either adjustment of relative prices or adjustment of behavior in both countries, this paper explores an institutional approach to rebalancing. Applying the lessons from Keynes' 1944 plan for a United States-United Kingdom international clearing union, the paper explores the creation of a bilateral United States-China settlement facility as an institutional contribution to the structural rebalancing of global imbalances.

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Bibliographic Details
Main Authors: Piffaretti, Nadia F., Rossi, Sergio
Language:English
en_US
Published: World Bank, Washington, DC 2010-01
Subjects:ACCUMULATION OF RESERVES, ADVANCED COUNTRIES, ARBITRAGE, BANK ACCOUNTS, BANK DEPOSITS, BANK PAYMENTS, BENCHMARK, BILATERAL TRADE, BONDS, BORROWING, CAPITAL LOSS, CENTRAL BANK, CENTRAL BANKS, CIRCULAR FLOW, COMPARATIVE ADVANTAGE, CONSUMERS, CONSUMPTION EXPENDITURES, CONSUMPTION GOODS, CORPORATE PROFITS, CORPORATE SAVINGS, CREDIBILITY, CREDIT LINES, CREDITOR, CREDITS, CURRENCY, CURRENCY REGIME, CURRENCY UNION, CURRENT ACCOUNT, CURRENT ACCOUNT BALANCE, CURRENT ACCOUNT DEFICIT, CURRENT ACCOUNT DEFICITS, CURRENT ACCOUNT IMBALANCE, CURRENT ACCOUNT IMBALANCES, CURRENT ACCOUNT SURPLUS, DEBT, DEBT INSTRUMENT, DEBT INSTRUMENTS, DEBTOR, DEBTOR COUNTRIES, DEBTOR COUNTRY, DEBTS, DEFICITS, DEPOSITORY, DEPOSITORY INSTITUTIONS, DEPOSITS, DEPRECIATION, DEPRESSION, DERIVATIVE, DERIVATIVE INSTRUMENT, DEVELOPING COUNTRIES, DEVELOPMENT BANK, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICIES, DOLLAR EXCHANGE RATE, DOMESTIC DEMAND, DOMESTIC ECONOMY, DOMESTIC FINANCIAL MARKET, DOMESTIC INTEREST RATES, EARNINGS, ECONOMIC ACTIVITY, ECONOMIC CRISIS, ECONOMIC GROWTH, ECONOMIC IMBALANCE, ECONOMIC SYSTEMS, EMERGING MARKETS, EQUILIBRIUM, EXCESS CAPACITY, EXCHANGE MARKET, EXCHANGE MARKETS, EXCHANGE RATE, EXCHANGE RATE POLICY, EXCHANGE RATES, EXCHANGE-RATE, EXPORTERS, EXPORTS, EXTERNAL DEBT, EXTERNAL DEFICIT, EXTERNAL DEFICITS, EXTERNAL FINANCING, EXTERNAL POSITIONS, FINANCES, FINANCIAL ARCHITECTURE, FINANCIAL ASSETS, FINANCIAL CRISIS, FINANCIAL FRAGILITY, FINANCIAL INTERMEDIATION, FINANCIAL MARKETS, FINANCIAL RELATIONSHIP, FINANCIAL SECTOR, FINANCIAL STABILITY, FINANCIAL SYSTEM, FISCAL DEFICITS, FOREIGN INVESTMENT, FOREIGN TRADE, FOREIGN TRANSACTIONS, GDP, GLOBAL ECONOMY, GLOBAL FINANCIAL SYSTEM, GLOBAL IMBALANCES, GLOBAL TRADE, HOLDINGS, HOUSEHOLD SAVING, HOUSEHOLDS, IMBALANCE, IMPORTS, INCOME, INCREASING RETURNS, INSTRUMENT, INSURANCE, INTERNATIONAL BANK, INTERNATIONAL CLEARING SYSTEM, INTERNATIONAL COOPERATION, INTERNATIONAL CURRENCY, INTERNATIONAL FINANCIAL ARCHITECTURE, INTERNATIONAL FINANCIAL MARKETS, INTERNATIONAL MONETARY SYSTEM, INTERNATIONAL RESERVE, INTERNATIONAL RESERVES, INTERNATIONAL SETTLEMENT, INTERNATIONAL SETTLEMENTS, INTERNATIONAL TRADE, INTERNATIONAL TRANSACTIONS, INVESTMENT GOODS, ISSUANCE, KEY CURRENCIES, LENDER, LENDER OF LAST RESORT, LIQUID ASSET, LIQUIDITY, LOCAL CURRENCY, LOW INTEREST RATES, MACROECONOMICS, MARKET FORCES, MARKET SHARES, MARKET TRANSACTIONS, MISALIGNMENT, MONETARY AUTHORITIES, MONETARY ECONOMICS, MONETARY FUND, MONETARY INSTABILITY, MONETARY INSTITUTION, MONETARY REFORM, MULTILATERAL TRADE, NATIONAL CURRENCIES, NATIONAL ECONOMIES, OIL EXPORTERS, OIL PRICES, OIL-EXPORTING COUNTRIES, OPEN ECONOMIES, OUTPUT, OUTSTANDING BALANCES, PAYMENT FACILITY, PAYMENT ORDERS, PAYMENT SYSTEMS, PAYMENT-VERSUS-PAYMENT, POLICY RESPONSE, PRIVATE PARTIES, PRODUCT MARKETS, PRODUCTIVE INVESTMENT, PRODUCTIVITY INCREASES, PUBLIC SPENDING, QUOTAS, RATES OF INTEREST, RELATIVE PRICES, REPAYMENTS, RESERVE, RESERVE ACCUMULATION, RESERVE BANK, RESERVE CURRENCIES, RESERVE CURRENCY, RESERVE FUND, RESERVES, RETURNS, SALES REVENUES, SETTLEMENT, SETTLEMENT FACILITY, SETTLEMENT PROCEDURES, SETTLEMENT SYSTEM, SETTLEMENT SYSTEMS, SLOWDOWN, SOCIAL PROTECTION, SOVEREIGN BONDS, STRUCTURAL REFORM, STRUCTURAL REFORMS, SUPPLY SIDE, SURPLUS COUNTRIES, SURPLUS COUNTRY, SURPLUSES, TIME HORIZON, TOTAL OUTPUT, TRADE ACCOUNTS, TRADE DEFICIT, TRADE DEFICITS, TRADE RELATION, TRADE RELATIONS, TRADE SURPLUS, TRADE TRANSACTIONS, TRADING, TRADING PARTNER, TREASURY, TREASURY BILLS, VALUE ADDED, WEALTH, WORLD ECONOMY, WORLD TRADE,
Online Access:http://documents.worldbank.org/curated/en/2010/01/11696976/institutional-approach-balancing-international-monetary-relations-case-us-china-settlement-facility
https://hdl.handle.net/10986/19859
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