Bankruptcy

Noises for a More Powerful Central Bank

By mcbride

Russia and China have both previously made noises about a new currency; however, now the United Nations has joined this chorus along with a proposal for a more powerful central bank.  ?In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises.  It added that the present system, under which the dollar acts as the world’s reserve currency , should be subject to a wholesale reconsideration?. ?But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund.??  This sounds like a proposal to give more power to a world wide central bank, which would (were it established) no doubt need power to enforce its edicts.  However, if the economy continues to slide, as some anticipate, there will likely be a call to reduce the power of centralized banks rather than give them more power. 

Here is a link: http://www.telegraph.co.uk/finance/currency/6152204/UN-wants-new-global-currency-to-replace-dollar.html

Michael

Full post as published by Texas Lawyer Blog on September 08, 2009 (boomark / email).