The classification is based on IMF staff’s assessment of the observed (de facto) exchange rate arrangement rather than on the exchange arrangement a member notifies to the Fund in accordance with Article IV, Section 2(b) of the Fund’s Articles of Agreement (de jure arrangement). On the classification of exchange rate regimes, see also Reinhart and Rogoff (2004).
2  BIS Review 49/2009  the gap between advanced economies and emerging markets has widened substantially (Lane and Milesi-Feretti 2008). The pattern of financial integration has been very different as well. For advanced economies, financial integration has mainly taken the form of an intensive two-way trade of debt and equity instruments, reflecting portfolio optimisation strategies by private agents (Fecht et a. 2007).