INTERNATIONAL POLICY ANALYSIS Reforming the International Monetary and Financial Architecture JOSÉ ANTONIO OCAMPO August 2014 n The international monetary and financial architecture has experienced important re­forms in recent years, yet profound limitations remain. Major gaps in the regulatory framework concern financial cross-border regulation, debt management, macroeco­nomic coordination, monetary and governance reform. n The IMF continues to face a stigma for many borrowers and the World Bank’s un­der-capitalization implies that it is unlikely to play the very active role it did during the North-American financial crisis in terms of providing future counter-cyclical financing. n The present, elaborate system of macroeconomic policy coordination has not avoid­ed the creation of new global imbalances, the most important caused by surplus accumulation in the EU, rising deficits in a large group of emerging and developing countries, insufficient capital account regulations and a lack of sovereign debt work­out mechanisms. n International monetary reform should involve three elements: the design of an apex organization more representative than the G20, advanced participation of develop­ing countries in the Bretton Woods Institutions and on the Financial Stability Board, and the design of a multi-layered financial architecture, with active participation of regional and sub-regional institutions.