Today, we must get on with the job of building an international monetary order for the 21st century—one that encourages market-based solutions to global imbalances. To achieve these solutions, we need a framework that can manage a world where open economies interact with economies whose markets are not yet allowed to operate freely.
We must accommodate the fact that some systemically important economies, including China, still prefer the stability of a fixed or quasi-fixed exchange rate regime. We need rules that will allow market signals to come through and market forces to work during what could be a lengthy period of coexisting fixed and floating exchange rate systems.