On September 3-4, 2009, SUERF and Utrecht University School of Economics jointly organized the 28th SUERF Colloquium on "The Quest for Stability" in Utrecht, the Netherlands. The papers contained in this SUERF Study jointly published with DNB and Rabobank are based on contributions to this...

This paper will propose a plan to reform international finance – the World Financial Authority (WFA) Plan. Under such a plan, the IMF and other existing international financial institutions would be reformed and coordinated around a newly created WFA. The WFA would have two core functions....

This paper formulates a second generation currency crises model, which is consistent with many facts regarding the structural economies in Southeast asia. Emphasis is laid on the propagation mechanism from a financial crisis to a currency crisis. Micro-foundation, endogenous labour supply, and...

China’s policy responses to the 2008 financial crisis and its economic performance afterwards have received wide attention from researchers and policy makers throughout the world, particularly in the United States. The purpose of this paper is to examine the context in which China’s policy...

Iceland is a member of the IMF and of the WTO, a party to the European Economic Area Agreement, and a signatory of the OECD Code of Liberalisation of Capital Movements. Iceland is bound by Art. VIII IMF not to impose restrictions on current payments. Furthermore, under the GATS, Iceland cannot...

A recent report from the Center for Economic Policy Research (CEPR) has advocated that fixed conversion rates for the start of EMU should be preannounced as soon as possible. The aim of this short paper is to focus on the potential dangers of such a decision. Indeed, the CEPR report propositions...

This paper presents a framework to analyze financial globalization. It argues that financial globalization needs to take into account the relation between money (particularly in its role as store of value), asset and factor price flexibility, and contractual and regulatory institutions....

The cost of systemic risk in the over-the-counter (OTC) derivatives market is described and estimated. Modern portfolio theory (MPT), applied to OTC derivatives, predicts this cost, which has been growing since 1970. This cost grew because Congress blocked MPT's predicted market forces. Without...

Over-the-counter (OTC) traders cannot pursue the two fundamental objectives of portfolio management, the identification of portfolio market risk and return and its diversification. The result of this major market shortcoming is a complex, systemically risky market disequilibrium. The tradable...