The U.S. has now strengthened its financial system by letting banks branch regionally. European banks are beginning to merge transnationally and to operate branches in other countries. The next step is to strengthen the global system. Financial crises in Latin America in the 1980s, Mexico in 1994-95, and now in Asia should alert governments to the need for fundamental reform. More money for the IMF delays reform of the international system, encourages moral hazard, and subsidizes risk.
Fundamental reform begins with global banking and a true lender of last resort.