theAnalysis.news The Failure of Global Finance is Systemic
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Mar 3, 2025 Jane D’Arista, a research associate at the Political Economy Research Institute, dives into the pitfalls of global finance. She discusses the risks of US dollar liabilities and the harmful effects of export-led growth models. D’Arista advocates for a reformed Federal Reserve, emphasizing systemic issues affecting small businesses. She critiques current capital requirements and highlights how a debt-driven economy damages both developed and emerging markets. Her passionate push for innovative policy solutions offers a fresh perspective on achieving financial stability.
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Evolution of Global Financial System
- The global financial system evolved into a pro-cyclical, debt-fueled export-led growth model.
- This evolution intensified vulnerabilities and created useless debt that precipitated repeated crises.
Need for Systemic Reform
- Effective financial crisis management requires systemic reforms beyond partial fixes.
- Restoring central bank control over the entire financial sector and reintroducing reserves can stabilize the system counter-cyclically.
Proposal for Global Reserve System
- Create an international clearing agency to manage currency reserves and daily transactions globally.
- This agency would enable all currencies to be used internationally and allow automatic counter-cyclical adjustments.
