while surplus countries can delay adjustment, in the end, all nations suffer when the system breaks down. in the current environment, growing strains could spur protectionism, both in trade and finance, or alternatively, raise sanctions. 15 the negative consequences for the global economy would be considerable. all countries should accept their responsibilities for promoting an open, flexible, and resilient international monetary system. responsibility means recognizing spillover effects between economies and financial systems and working to mitigate those that could amplify adverse dynamics. it means submitting their financial policies to peer review within the fsb and external review by the imf. fundamentally, it means adopting coherent macro policies and allowing real exchange rates to adjust to achieve external balance over time. indeed, in a world of global capital, all systemically important countries and common economic areas should move towards market - based exchange rates. references bergsten, f. 2009. " the dollar and deficits : how washington can prevent the next crisis. " foreign affairs 88 ( 6 ) november / december 2009. bordo, m. 1992. " the bretton woods international monetary system : a historical overview, " in a retrospective of the bretton woods system. m. bordo and b. eichengreen, eds. 1993. chicago : university of chicago press. eichengreen, b. 1992. golden fetters : the gold standard and the great depression, 19191939. new york : oxford university press. international monetary fund. 2009. articles of agreement. washington, d. c. : imf. lipsey, r. 1994. " u. s. foreign trade and the balance of payments, 1800 - 1913. " nber working paper no. 4710. reinhart, c. and k. rogoff. 2009. this time is different : eight centuries of financial folly. princeton : princeton university press. rostow, w. w. 1978. the world economy : history and prospect. austin, texas : university of texas press. triffin, r. 1960. gold and the dollar crisis. new haven : yale university press. see bergsten ( 2009 ). united nations. 2009. report of the commission of experts of the president of the united nations general assembly on reforms of the international monetary and financial system. 21 september 2009. available at < http : / / www. un. org / ga / econcrisissummit / docs / finalreport _ coe. pdf >

miroslav singer : sovereign debt crisis in europe – assessing the current european instruments – addressing the challenges ahead speech by mr miroslav singer, governor of the czech national bank, at the european parliament committee on economic and monetary affairs public hearing, brussels, 23 january 2012. * * * members of the european parliament, thank you for inviting me to this forum and giving me this opportunity to comment on the european financial stability facility ( efsf ). the last few weeks have brought us three new events that are rightly or wrongly regarded as game changers and i would like to discuss the efsf in the context of those events. they are : 1 ) the ecb ’ s long - term loans to commercial banks and the widening of the range of guarantees which the ecb accepts from commercial banks for them, 2 ) the fiscal pact and 3 ) the rating downgrades. i would like start by saying that the provision of liquidity to commercial banks in europe by the ecb gives us time to define more precisely the mission, design and operation of the facility as well its position among the institutions charged with resolving the debt crisis. if we want to reduce the probability that some european nations and their banking groups will face liquidity problems that they cannot solve by obtaining funds from the market, we need to eliminate the following uncertainties relating to the efsf : 1. it is not clear what benefits we expect from the efsf or how it is supposed to generate them. many objectives have been hinted at in the more than 18 months since it was created, but nothing specific has been implemented so far. yet each of the objectives is highly important, be it the issuing of protection certificates or the establishment of the special purpose vehicle or the purchasing of peripheral countries ’ bonds in the secondary market. 2. the ambiguity in the definition of the facility ’ s mission is indicated by the changes made both to its guarantee structure, even though the structure remains based on the “ per partes ” principle, and to its rules of operation during its short lifetime. the fact that the term efsf 2 has caught on for the new structure reveals just how fundamental these changes are seen to be. 3. uncertainty also exists on the issue of increasing the effective capital strength of the facility using concepts such as leverage ( via an spv ), protection / insurance, loss tranches and short - term funds. from the reputational perspective, these are exceptionally controversial issues, because many market participants interpret them as