Benn Steil

Geo-Graphics

A graphical take on geoeconomic issues, with links to the news and expert commentary.

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Showing posts for "International Institutions"

Lender of Last Resort

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The U.S. and IMF bailout of Mexico in 1994 is often cited as a textbook example of a successful financial rescue. The economy stabilized allowing Mexico to pay back most of its loans in less than 2 years. In response to the current crisis the Fed took on the role of global dollar lender of last resort by lending to foreign, primarily European, central banks. These loans were paid back more quickly than Mexico’s. Read more »

Fixing Finance

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G20 leaders are meeting in Washington to discuss a possible overhaul of global finance. One topic on the agenda is whether to increase the resources of the IMF, which stood at $201 billion at the end of August. However, many underrepresented emerging market countries, such as China, would be wary of such a move without a shift in the power structure. The following articles tackle the agenda of the upcoming G20 meeting. Read more »

Can the G7 Stabilize the Yen?

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The G7 has expressed concern over the implications of excessive yen volatility for financial and economic stability, but fell short of promising coordinated action. The graph above illustrates the extreme nature of the yen’s rise. For example, the yen has appreciated 22% against the euro and 35% against the Aussie dollar in the last month alone. The G7 may have to intervene in foreign currency markets to restore stability. Read more »

IMF Revival

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The financial crisis has forced the IMF back onto the world stage. As the chart below indicates, many countries’ bank debt to GDP ratio has exploded in the past five years, suggesting they may need assistance rolling over their loans. The IMF has rediscovered its mission as evidenced by the number of countries considering assistance. The following articles discuss the revival of the IMF and suggest possible reforms. Read more »

Can the G7 Save the Market?

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The Federal Reserve has announced a series of extraordinary measures to unclog credit markets. However, credit markets remain frozen, and as the graph above indicates, the equity markets have responded negatively. The continued credit market freeze points to a need for strong policy action. The following articles discuss a possible role for international coordination through the G7 and IMF. Read more »