Using the Special Drawing Rights as a Lever to Reform the International Monetary System - Report of an SDR Working Party
(also available as the The Federalist Debate Papers No. 1- Supplement to The Federalist Debate No. 2, July 2014, Year XXVII)
The present report starts (section I) by reaffirming the existence of a “built-in-destabilizer” in the present IMS, which is based on the use of national currencies -mainly the US dollar- as reserve currencies, and by presenting the theoretical first-best solution, which unfortunately is likely to remain out of reach for long. Nevertheless, the need to break free from the status quo leads to re-explore the potential role of the SDR (section II) for strengthening monetary and financial stability, in the present globalized and multi-polar world. Then, based on analytic elements, the report makes nine suggestions (A to I) aimed at overcoming the present deficiencies in the functioning of the IMS through an enhancement of official SDRs (section III) and the development of a private SDR market (section IV). [...]
