| In a radical report, the UN Conference on Trade and | | | | institution, including the G20 , has come up with an |
| Development (UNCTAD) has said the system of | | | | alternative |
| currencies and capital rules which binds the world | | | | In a radical report, the UN Conference on Trade and |
| economy is not working properly, and was largely | | | | Development (UNCTAD) has said the system of |
| responsible for the financial and economic crises. | | | | currencies and capital rules which binds the world |
| It added that the present system, under which the | | | | economy is not working properly, and was largely |
| dollar acts as the world's reserve currency , should | | | | responsible for the financial and economic crises. |
| be subject to a wholesale reconsideration. | | | | It added that the present system, under which the |
| Although a number of countries, including China and | | | | dollar acts as the world's reserve currency , should |
| Russia, have suggested replacing the dollar as the | | | | be subject to a wholesale reconsideration. |
| world's reserve currency, the UNCTAD report is the | | | | Although a number of countries, including China and |
| first time a major multinational institution has posited | | | | Russia, have suggested replacing the dollar as the |
| such a suggestion. | | | | world's reserve currency, the UNCTAD report is the |
| In essence, the report calls for a new Bretton | | | | first time a major multinational institution has posited |
| Woods-style system of managed international | | | | such a suggestion. |
| exchange rates, meaning central banks would be | | | | In essence, the report calls for a new Bretton |
| forced to intervene and either support or push down | | | | Woods-style system of managed international |
| their currencies depending on how the rest of the | | | | exchange rates, meaning central banks would be |
| world economy is behaving. | | | | forced to intervene and either support or push down |
| The proposals would also imply that surplus nations | | | | their currencies depending on how the rest of the |
| such as China and Germany should stimulate their | | | | world economy is behaving. |
| economies further in order to cut their own | | | | The proposals would also imply that surplus nations |
| imbalances, rather than, as in the present system, | | | | such as China and Germany should stimulate their |
| deficit nations such as the UK and US having to take | | | | economies further in order to cut their own |
| the main burden of readjustment. | | | | imbalances, rather than, as in the present system, |
| "Replacing the dollar with an artificial currency would | | | | deficit nations such as the UK and US having to take |
| solve some of the problems related to the potential | | | | the main burden of readjustment. |
| of countries running large deficits and would help | | | | "Replacing the dollar with an artificial currency would |
| stability," said Detlef Kotte, one of the report's | | | | solve some of the problems related to the potential |
| authors. "But you will also need a system of managed | | | | of countries running large deficits and would help |
| exchange rates. Countries should keep real exchange | | | | stability," said Detlef Kotte, one of the report's |
| rates [adjusted for inflation] stable. Central banks | | | | authors. "But you will also need a system of managed |
| would have to intervene and if not they would have | | | | exchange rates. Countries should keep real exchange |
| to be told to do so by a multilateral institution such | | | | rates [adjusted for inflation] stable. Central banks |
| as the International Monetary Fund." | | | | would have to intervene and if not they would have |
| The proposals, included in UNCTAD's annual Trade | | | | to be told to do so by a multilateral institution such |
| and Development Report , amount to the most | | | | as the International Monetary Fund." |
| radical suggestions for redesigning the global | | | | The proposals, included in UNCTAD's annual Trade |
| monetary system. | | | | and Development Report , amount to the most |
| Although many economists have pointed out that the | | | | radical suggestions for redesigning the global |
| economic crisis owed more to the malfunctioning of | | | | monetary system. |
| the post-Bretton Woods system, until now no major | | | | |