ABSTRACT
This chapter provides a discussion of why the reform proposals are of little benefit to the objective of an international financial architecture supportive of developing countries. It suggests that several of the alternatives rejected in the pre–Bretton Woods discussion could provide a basis for a more stable financial system suitable to the needs of emerging market economies. The developed world's policy response to the financial crisis has produced a growing chorus of criticism of the international financial system by emerging market government officials. Keynes's proposal was based on the simple idea that financial stability was predicated on a balance between imports and exports, with any divergence from balance providing automatic financing of the debit countries by the creditor countries via a global clearinghouse or settlement system for trade and payments on current account. Indeed, the major fora for coordination are now in the G-20 and the Financial Stability Forum, both also dominated by US policy preferences.
