So, here's the plan:
<http://www.foreignrelations.org/public/pubs/IFATaskForce.html>
In brief:
> 1. Greater rewards for joining the "good housekeeping club." The IMF should
> lend on more favorable terms to countries that take effective steps to
> reduce their crisis vulnerability and should publish an assessment of these
> steps so the market can take note.
> 2. Capital flows‹avoiding too much of a good thing. Emerging economies with
> fragile financial systems should take transparent and nondiscriminatory tax
> measures to discourage short-term capital inflows and encourage less
> crisis-prone, longer-term ones, like foreign direct investment.
> 3. The private sector: promote fair burden-sharing and market discipline.
> All countries should include "collective action clauses" in their sovereign
> bond contracts. In extreme cases where rescheduling of private debt is
> necessary, the IMF should provide financial support only if debtor
> countries are engaged in "good faith" rescheduling discussions with their
> private creditors, and it should be prepared to support a temporary halt in
> debt payments. The IMF should also encourage emerging economies to
> implement a deposit insurance system that places the main cost of bank
> failures on shareholders and on large, uninsured private creditors‹not on
> small depositors or taxpayers.
> 4. Just say no to pegged exchange rates. The IMF and the Group of Seven
> leading industrial countries should advise emerging economies against
> adopting pegged exchange rates and should not provide funds to support
> unsustainable currency pegs.
> 5. IMF crisis lending: less will do more. For country crises, the IMF
> should adhere consistently to normal lending limits and should abandon huge
> rescue packages. For systemic crises that threaten the international
> monetary system, the IMF should turn to its existing credit lines when
> problems are largely of the country¹s making and to special contagion funds
> when the country is an innocent victim.
> 6. Refocus the IMF and the World Bank: back to basics. The IMF should focus
> on monetary, fiscal, exchange rate, and financial sector policies, not on
> longer-term structural reforms. The World Bank should focus on longer-term
> structural and social aspects of development, not on crisis management or
> macroeconomic advice.
> 7. Generate political support for and ownership of financial reforms. A
> global conference of finance ministers should convene to reach a consensus
> on priorities and timetables for specific actions that countries will take
> to strengthen national financial systems.
>
No problems at BIS, I guess...
-- bill