The global financial safety net provides backstop during times of financial
crises. Its elements underwent fundamental changes since the global financial
crisis. The International Monetary Fund (IMF) introduced new facilities on the
global level, new regional financial arrangements (RFAs) were created, and
bilateral swap agreements emerged as a new element. In this paper, we ask how
these changes influence the use of the different safety net options, and what
role RFAs have in the safety net today. We created a database with all the
cases in which a RFA member drew on one of the elements of the global safety
net. This allows us to analyze which other options the country had at hand,
and to examine their use along the institutional design in terms of
timeliness, volume, and policy conditionality. We find today’s global
financial safety net to be not a global, but a geographically and structurally
scattered net. RFAs make the safety net safer only for small member countries.
Just few countries can count on a bilateral swap line, their selection being
subject to the discretion of the swap partner. Thus, a large number of
countries fall through important knots of the safety net and have the IMF as
their only option.
300 Sozialwissenschaften::320 Politikwissenschaft
Safety for Whom?
The Scattered Global Financial Safety Net and the Role of Regional Financial
Politik- und Sozialwissenschaften
KFG working paper