PARIS (MNI) – With determination and good will, the G20 nations can
improve the international monetary system, notably by tackling
disruptive capital flows, European Central Bank Governing Council member
Christian Noyer said Friday.
“Abrupt capital inflows and outflows, the accumulation of exchange
rate reserves in certain countries, the volatility of exchange rates”
all create a number of problems and risks, the governor of the Bank of
France said in a speech text for delivery at a conferences in Vannes,
France.
The goal must not be to stigmatize individual countries or to
create rules that are too rigid — and in the end counter-productive —
but rather “to manage international liquidity better,” Noyer said.
Among the approaches that the G20 finance ministers are exploring
are financial “safety nets” that would reduce the need to hoard forex
reserves as a shield against currency crises or the expanded use of
special drawing rights as an alternative international means of payment,
Noyer explained.
“This work is underway and will enrich our coming meetings,” he
said. “The stakes are high: the objective is to transform a crisis G20,
which demonstrated its effectiveness, into a G20 of macroeconomic
coordination, which the global economy dearly needs.”
Better economic coordination and governance is also the challenge
facing Europe, Noyer argued.
“The sovereign debt crisis is not a crisis of the euro,” he
stressed. But it has taught us that the members of monetary union are
“extraordinarily interdependent and that if some countries lose control
over their public finances, this will have fallout for the entire zone.”
The creation of the European Financial Security Facility is the
demonstration that members of monetary union have come to recognize the
need for solidarity in the face of crisis, he said.
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