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Towards an Asia-style monetary framework

Many methods for shoring up financial and monetary stability now practised by central banks around the world were tried and tested in the region over the past 20 years.

Published Tue, Feb 24, 2015 · 09:50 PM
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THE cacophonous aftermath of the global financial crisis has prompted a substantial rethink of international economic policy doctrine. We are moving away from a near-universal belief in the beneficial effects of unfettered capital movements towards a much more managed system of world money. Many of the characteristics of this new framework bear the "made in Asia" hallmark.

In a decidedly imperfect world, this is a fortunate development. It holds out the prospect that the global economy may be better run in the next 20 years than in the last two decades.

Many methods for shoring up financial and monetary stability now practised by finance ministries and central banks around the world were tried and tested in different ways in Asia over the past 20 years. At the time, they attracted criticism, disdain and revilement. Now there is growing recognition that they are the best available means for dealing with multiple sources of uncertainty. These shifts are surfacing at a time when coordination between different monetary authorities remains fractured and impaired, underlined by the different approaches to overcoming the lingering financial crisis in Europe, Asia and the United States.

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