The Potential of Special Drawing Rights
The G20's unfinished business
The Group of 20 (G20) recently endorsed the issuance of $250bn of Special Drawing Rights (SDR) by the IMF, but it made no arrangements for rich countries to transfer their allocations to poor ones. The idea was not even mentioned. Yet that is where the real benefits of an SDR issue would come from. It could fill two distinct gaps in the current financial architecture. A memorandum by George Soros
The IMF is faced with a novel task. It must protect the countries at the periphery of the global financial system from a devastating storm that emanated from the centre. The periphery countries need assistance: (1) to ensure the continued availability of credit; and (2) to enable them to engage in countercyclical fiscal policies. An SDR issue, with the rich countries transferring their allocation to the poorer ones, could help in both respects ...
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More on the subject:
>>> Proposals for a Profound Reform of International Finance
>>> Increased IMF Funding without Reform?
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