A Counter Cyclical Framework for a Development Friendly International Financial Architecture


  • Working Papers


  • The major task of a development-friendly international financial architecture is to mitigate pro-cyclical effects of financial markets and open “policy space” for counter-cyclical macroeconomic policies in the developing world. This paper explores a series of policy instruments for this purpose: counter-cyclical prudential regulatory and supervisory frameworks; market mechanisms that better distribute the risk faced by developing countries through the business cycle; multilateral instruments that encourage more stable private flows; and better provision of counter-cyclical official liquidity. It also suggests that regional macroeconomic consultation, and common reserve funds or swap arrangements among developing countries can play a role in this regard.

fecha de publicación

  • 2007-07

Líneas de investigación

  • Contagion
  • Counter-Cyclical Macroeconomic Policies
  • Financial Crises
  • Volatility


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