U.S. Options for Modifying the International Monetary System

摘要

This report on international banking addresses such questions as whether the probability of an international banking crisis has risen with the growth of international bank lending since the early 1960s and whether the growth of international bank lending has reduced the ability of the lender of last resort (LLR) to function adequately. It is concluded that risks in international lending have increased over the last five years and that they will continue to increase, and that national LLRs are ill-suited to provide LLR assistance to international banks. Proposals for an international system of deposit insurance are offered and ways of dealing with insolvent banks are suggested. The role of commercial banks in the debt renegotiation process is defined and borrowing by less developed countries is analyzed. The future of international reserve arrangements is predicted. Reviewer comments are appended to the report.