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Trade and Development Report 2015

Making the International Financial Architecture Work for Trade and Development

image of Trade and Development Report 2015
The Trade and Development Report (TDR), launched in 1981, is issued every year for the annual session of the Trade and Development Board. The Report analyses current economic trends and major policy issues of international concern, and makes suggestions for addressing these issues at various levels.

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External debt and debt crises: Growing vulnerabilities and new challenges

The preceding chapters analysed the major weaknesses in the existing international monetary and financial system, which limit its ability to promote and maintain global economic stability. They also constrain the efforts of policymakers, in developed and developing countries alike, to achieve more inclusive and sustainable growth paths. At the macroeconomic level, the current system has failed to substantially reduce volatility in financial markets and to correct persistent global imbalances. In addition to the often high social and economic costs to individual countries, this has also led to the continued accumulation of large external debts. At the microeconomic level, as discussed in the previous chapter, regulation has failed to curb the high risk-taking and procyclical behaviour of various financial institutions, which was at the root of the 2008-2009 global financial crisis. Thus the risk of future financial and debt crises persists.

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