The new international financial architecture: Reconstruction, renovation, or minor repair?

The Finance Ministers of the G-7 countries appear to believe that they have completed their work on the new architecture of the international financia l system. However, key issues have not: been resolved. The official communi ty must still decide if and when debt restructuring should replace large-sc ale official financing. It must still decide how to offset the effects of t he asymmetry between the large size of global capital markets and the small financial sectors of emerging-market countries. It must still devise stron g incentives for emerging-market countries to adopt the codes, reforms, and policies endorsed by the architecture exercise; It has not given serious, critical attention to the quality of International: Monetary Fund (IMF) con ditionality and the basic dilemma posed by open capital markets: Must the r estoration of investor confidence take priority over domestic stabilization and the mitigation of economic hardship in a crisis-stricken country? Copy - right (C) 2000 John Wiley & Sons, Ltd.