ABSTRACT
The international monetary architecture set up at Bretton Woods in 1944, comprised the International Monetary Fund (IMF) whose task was to promote macroeconomic stability by providing short-term financial support to countries facing a temporary balance of payments problem. This chapter outlines the move from a centralized international monetary architecture of the Bretton Woods period toward a multi-layered GFSN. It argues that among the various components of the global financial safety net (GFSN), regional financial safety nets (RFSNS) show the most promise and potential. The evolving multi-layered GFSN has increased the flexibility of the international monetary architecture created at Bretton Woods in 1944. The chapter discusses factors responsible for the evolution of the multi-layered GFSN and Asia's role. It discusses how Asia's voice could be strengthened further in the new architecture especially in the G20 and the IMF. The chapter highlights what other actions may be required to prevent a systemic crisis including contagion to innocent bystander countries in the future.
