The 2010 IMF quota and governance reforms are a significant development as they give greater voice to EM countries on governing the IMF policies and procedures. This development together with increasing awareness of sufficient global safety nets would strengthen IMF recourses and reduce their stigma effect. Again, there is a symmetry issue in the provision of liquidity during financial stress times – whether there should be internationally designed mechanisms enforcing countries that supplied excessive liquidity in the first place also to provide liquidity to all recipient countries during financial stress times such as through currency swap arrangements. The confidence function of the IMS highlights the fact that all stakeholders including financial markets have greatest confidence in the functioning, resources and governance of the system. Strengthening its recourses, improving its governance and advancing its functions will crucially bolster all stakeholders’ confidence in the system. What have been done recently along the lines of the 2010 IMF quota and governance reform, the inclusion of the renminbi in the SDR system and the recent increases in the IMF resources greatly improved confidence in the IMS. The adjustment mechanism of an IMS is mostly related to its sustainability but also affects its confidence function. The IMS requires a symmetric and fair adjustment mechanism. The G20 plays a central role in the adjustment mechanism of the IMS through fostering international policy coordination and cooperation. The IOs, especially the IMF, largely execute this G20 objective through bilateral surveillance and multilateral surveillance or oversight of the world economy.

Turalay Kenç: Stocktaking of international financial architecture Remarks by Mr Turalay Kenç, Deputy Governor of the Central Bank of the Republic of Turkey, at the “Stocktaking of International Financial Architecture” Conference, organized by the Reinventing Bretton Woods Committee (RBWC), Shanghai Development Research Foundation (SDRF), Research Institute for Banking and Finance, China (PBOC) and Korea Institute for International Economic Policy (KIEP), Shanghai, 26 February 2016. *  *  *  Over the last two decades the world has witnessed substantial increases in the trade volume to global GDP ratio, sharply grown international investment positions and significantly deepened production supply chains in the most part of the globe. As a result, monetary and financial policies across countries have become much more correlated. The conference organizers rightly asked the most crucial question whether the international monetary system (IMS) is still sufficiently stable in this current environment with a growing interconnectedness. In addition to this heightened interconnectedness, the global economy and financial markets face the challenges of the unconventional and unusual monetary policies in the advanced economies as well as diverging monetary policies of these countries, uncertainty in commodity prices, the risk of China’s economic hard-landing and the unintended market liquidity consequences of the recent financial sector reforms across the world. Large asset purchasing programs of the major central banks have depressed global bond markets with decreasing long-term yields as well as short-term yields and their negative nominal policy rates further destabilized bond markets and in general financial markets.