Working paper

Global and regional financial safety nets: lessons from Europe and Asia

This paper analyses the relationships between global and regional financial safety nets, and uncovers the potential tensions and operational challenge

Publishing date
20 November 2013
Authors
Shahin Vallée

The Asian financial crisis (1997) and the European crisis (2009) have both contributed to the development and deepening of regional safety net arrangements. This paper analyses the relationships between global and regional financial safety nets, and uncovers the potential tensions and operational challenges associated with the involvement of several institutional players with potentially different interests, analytical biases and governance. The G20 has acknowledged the importance of these new players for the international monetary system, but the principles for cooperation between the IMF and regional financing arrangements are far too broad and ad hocto contribute to a coherent and effective architecture. This paper tries to establish some lessons learned from the Asian financial crisis in 1997 and the current European crisis in order to enhance the effectiveness, efficiency, equity and governance of these arrangements. In particular, it proposes changes to the IMF articles of agreement to allow for lending or guarantees to regional arrangements directly and it establishes some key desirable features and practices of regional mechanisms that should be adopted everywhere to ensure some global consistency, particularly in the field of macroeconomic surveillance, programme design and conditionality.

About the authors

  • Shahin Vallée

    Shahin Vallée is head of DGAP’s Geo-Economics Program. Prior to that, he was a senior fellow in DGAP’s Alfred von Oppenheim Center for European Policy Studies.

    Until June 2018, Vallée was a senior economist for Soros Fund Management, where he worked on a wide range of political and economic issues. He also served as a personal advisor to George Soros. Prior to that, he was the economic advisor to Emmanuel Macron at the French Ministry for the Economy and Finance, where he focused on European economic affairs. Between 2012 and 2014, Vallée was the economic advisor to President of the European Council Herman Van Rompuy. This experience has put him at the heart of European economic policy discussions since 2012, in particular on issues related to the euro area and international policy coordination (IMF, G20). Having started his career working for social investment vehicles and entrepreneurship in Africa, he has also worked as a visiting fellow at Bruegel, a Brussels-based economic think tank, and as an economist for a global investment bank in London.

    Vallée is currently completing a PhD in political economy at the London School of Economics and Political Science. He holds a master’s degree from Columbia University in New York, a degree in public affairs from Sciences Po in Paris, and an undergraduate degree in econometrics from the Sorbonne.

Related content

Comment

Ukraine needs external financial assistance now

Planning Ukraine’s reconstruction tomorrow is important but meeting its financial needs today is more pressing and requires urgent action.

Arancha González Laya, Gabriel Felbermayr, Moritz Schularick, Shahin Vallée and Guntram B. Wolff