That said, central banks should aim to improve the current infrastructure for conducting foreign exchange swap arrangements, ensuring that future policy responses face no technical obstacles. The surge in official liquidity is, however, also associated with the launch of non-standard monetary operations in advanced economies. These policies seek to stabilise the domestic economy and have been criticised by emerging markets’ central banks.
Those of you who attended the G20 discussions in 2011 will remember the animated exchanges on this issue. If anything, this confirmed that, for any meaningful discussion of international monetary reform to take place, one needs to better understand the driving factors of global liquidity and its impact on domestic policies.