This article summarizes a number of key lessons from the effects of the global financial crisis that, with the passage of time, are having an important impact on views about global financial stability, macroeconomic theory and policy, income inequality and the role of the international financial architecture (IFA). The crisis followed a period of rapid growth in financial globalization that largely escaped the governing capacity of the IFA and coincided with a benign view of the limited role for government regulation given the self-disciplining power of financial institutions and the inherent stability and self-correcting capacity of capitalist market economies. The crisis has confirmed the important role for government policies in promoting economic recovery and minimizing or reversing the negative distributional effects of the crisis, although little has been done to deal with income inequality. Also, strong intergovernmental coordination has been required to correct major defects in the IFA.

This article provides an assessment of the progress that has been made since the outbreak of the global financial crisis in 2008 in official efforts to strengthen the international financial architecture with a view to minimising the risks and severity of future crises. These efforts, which have been spearheaded by the G20, have focused on the following four areas where the current arrangements for global financial governance need to operate more effectively: (1) international policy coordination to improve the international adjustment mechanism; (2) an international lender of last resort mechanism for countries confronting liquidity constraints or adverse spillover effects from global financial shocks; (3) the oversight of global financial stability; and (4) the coordination of international financial regulation. The progress to date in improving these four areas or functions of the international financial architecture has been very uneven. In addition, further reform is needed in strengthening the institutional underpinnings of the international financial architecture itself.

This paper examines the origin, evolution and recent operations of Singapore’s two sovereign wealth funds, Temasek Holdings (TSK) and the Government Investment Corporation (GIC). Singapore is a unique case in that it has two of the oldest and largest sovereign wealth funds. Both funds reflect a long history of sound macroeconomic fundamentals and strong fiscal discipline on the part of the Singapore government. The two funds have significantly different operating features and governance structures. TSK operates like an equity investment firm with significant independence in its day-to-day operations from the government and a relatively high degree of transparency; by contrast, GIC operates like an asset management company, under tight control by the government and with a relatively low degree of transparency. The paper concludes with some lessons from Singapore’s experience with its sovereign wealth funds for the on-going debate about the role of such funds in the international financial system.

Reform of the IMF and World Bank has been the focus of discussion since the middle of the last decade when efforts began to adapt the two institutions to deal with new problems of financial globalization associated with a series of financial crises among emerging markets. What began as a mainly “top-down” approach to institutional reform led by the major industrial countries has been broadened to a more comprehensive assessment of the role of the two Bretton Woods institutions in the international economic system, partly in response to “bottom up” pressures from international NGOs and other external stakeholders. Improvements have been made in the role of the two institutions in crisis prevention and crisis management, but a number of other important reforms have been under active debate and require implementation. Most importantly, changes in the governance structure of the Bank and Fund are required to restore the legitimacy and effectiveness of these institutions in the international system.

This paper provides an assessment of monetary and financial cooperation in Asia since the regional financial crisis of 1997–98, with a view to determining whether the emerging Regional Financial Architecture in Asia is compatible with the global financial architecture and what are the prospects for possible economic and monetary union. Monetary and financial cooperation has focused on four architectural pillars (economic policy surveillance, crisis prevention, liquidity support, and bond market development), which can be consistent with the global architecture. However, progress toward full integration is likely to be gradual and experimental, given the lack of strong regional institutions, regional economic disparities, and the need to build political commitment to such a goal.

This paper attempts to identify key factors that can account for the divergent economic performance of East Asia and Latin America during the second half of the 20th century. Within the triad of so-called “deep determinants” of economic growth (geography, policy and institutions), the paper argues that differences in policy and institutions are most important in accounting for this regional divergence. In contrast with East Asia, Latin America has exhibited continuing problems of macroeconomic instability and a much weaker degree of integration into the global economy. In addition, there are marked institutional differences between the two regions, with East Asia identified with stronger public institutions and indicators of government effectiveness.