The recent global financial crisis has renewed concerns about the inherent instability of the current international monetary system in which the world’s demands for asset or liquidity are met predominantly using the currency of one country, the United States dollar. If the supply of the global currency is inadequate to support global trade, the world faces deflationary risks. However, since the country issuing the global currency has the privilege of borrowing abroad in its own currency cheaply, its borrowing and, hence the supply of global currency, may become excessive. This may eventually become unsustainable, and may have significant systemic implications for the rest of the world, as witnessed in the global financial crisis. [Read more]
About Tarisa WatanagaseTarisa Watanagase had a long career at the Bank of Thailand and was Governor from 2006 to 2010. She was instrumental in the 1997 Thai crisis resolution and the ensuing supervisory and financial sector reforms. Currently, Dr. Watanagase speaks extensively on central banking and financial sector issues and is advisor to IFIs and central banks in Asia.
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