The world’s dollar-dominated monetary order has serious instabilities that can best be fixed by central banks explicitly coordinating policy, Claudio Borio, the chief economist of the Bank for International Settlements, argued in a new paper.

“The Achilles heel of the international monetary and financial system is that it amplifies the key weakness of domestic monetary and financial regimes, i.e. their inability to prevent the build-up and unwinding of hugely damaging financial imbalances,” Borio wrote. The “most ambitious possibility would be to develop and implement new global rules of the game that would help instill greater discipline in national policies.”

Source: BIS Channels Rajan as Borio Calls for New Global Monetary Order – Bloomberg


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