International Monetary System Reform
On March 24, 2009, Zhou gave a speech entitled Reform the International Monetary System, in which he argued that the ongoing financial crisis was made more severe by inherent weaknesses of the current international monetary system and called for a gradual move towards using IMF special drawing rights (SDRs) as a centrally managed global reserve currency. He argued that this would address the inadequacies of using a national currency as a global reserve currency, particularly the Triffin dilemma—the dilemma faced by issuing countries in trying to simultaneously achieve their domestic monetary policy goals and meet other countries' demand for reserve currency. Zhou explained global currency diversification was needed because an over-concentration of foreign assets denominated in the dollar may bring about undesired consequences. Zhou argued that it was regrettable that John Maynard Keynes's "farsighted" bancor proposal was not adopted at Bretton Woods in the 1940s.
Zhou also asserted China's increasing confidence in its own financial governance philosophies. He criticized western leaders for letting their banking sectors go astray due to loose regulations.
Read more about this topic: Zhou Xiaochuan
Famous quotes containing the words monetary, system and/or reform:
“There is no legislation—I care not what it is—tariff, railroads, corporations, or of a general political character, that all equals in importance the putting of our banking and currency system on the sound basis proposed in the National Monetary Commission plan.”
—William Howard Taft (1857–1930)
“Delight at having understood a very abstract and obscure system leads most people to believe in the truth of what it demonstrates.”
—G.C. (Georg Christoph)
“When I go into a museum and see the mummies wrapped in their linen bandages, I see that the lives of men began to need reform as long ago as when they walked the earth. I come out into the streets, and meet men who declare that the time is near at hand for the redemption of the race. But as men lived in Thebes, so do they live in Dunstable today.”
—Henry David Thoreau (1817–1862)