The first such workshop took place in Potsdam, Germany, on December 8 – 9, 2012. It was dedicated to an assessment of the proposal for a sustainable financial system made by the governor of the People’s Bank of China.
This is the first long-term proposal made by a major figure in today’s global financial system, and it builds on an impressive sequence of intellectual and political precedents. In a nutshell, the proposal envisages a transition from the present, Dollar-based system towards a system anchored in Special Drawing Rights (SDR) emitted by a suitably enhanced IMF. These SDRs, in turn, can be defined not in terms of consumer price indices as is the case with today’s currencies, but in terms of a price index for critical resources the world economy relies on. Relevant goods could include coal as well as emission permits for greenhouse gases. Ultimately, buffer stocks of related commodities may complement the classical instruments of monetary policy. Clearly, the proposal has major geopolitical, economic and environmental implications, all worth careful investigation.
The Potsdam workshop has been the first systematic effort at assessing that proposal. It was conducted in a sustainability perspective – a perspective all too often missing in financial debates. It is the starting point of a systematic inquiry on perspectives for a sustainable global financial system to be performed in the coming years.
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