New international financial architecture: New instruments to prevent and cope with financial and debt crises

Project description

The financial crisis has pointed unmistakably to the need for a reform of the international financial architecture since the crisis has led to major welfare losses in the affected countries and has tended to endanger the stability of the international financial system. As developing and emerging countries have considerably gained importance for the international financial markets, it is crucial to develop a set of instruments incorporating these countries. Two innovative instruments, which however have not yet been implemented, are a voluntary code of conduct and an international insolvency procedure for sovereign states. The resolution of past crises was often ad hoc and complicated and thus generated undue costs for both debtors and creditors. An insolvency procedure and an appropriate code of conduct should define and ease restructuring processes.
This project will deal with the following questions:

• Which risks arise for developing and emerging markets in the international financial markets?

• Which instruments are missing in the international financial architecture to stabilize international financial markets?