Tip of the Iceberg: How the Call for SDRs reveals the Urgency for Deeper Reforms of the Global Reserve System to Address Systemic Inequalities

Improving global governance
Posted May 21, 2021 | Bretton Woods Project, Bhumika Muchhala

Past proposals to reform the global reserve system have stressed the need to address the systemic inequalities in the international monetary system. UNCTAD has called for abandoning of the dollar as the single major reserve currency. A counterproposal is  creating a new global reserve currency and a Global Reserve Bank.to manage it. Bhumika Muchhala argues in this article for the Bretton Woods Project that the urgency of democratising multilateral economic and financial governance has never been greater. Global reserve allocations could be made akin to a global public good if defined by unconditional, predictable and needs-based characteristics.. Deficit countries could concentrate on financing domestic development priorities rather than protecting themselves through reserves, and the world could benefit from greater autonomy from US monetary policy.



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