The institutions and instruments of the Global Financial Safety Net (GFSN) represent the part of the global financial architecture that is responsible for providing an anti‐crisis and stabilization support to the countries in need. We argue that the standard understanding of the GFSN as a system consisting of four layers – national reserves, bilateral swaps, regional financing arrangements and the IMF – demands rethinking. We suggest the concept of an enlarged GFSN, namely its expansion by two additional elements – multilateral development banks and bilateral financial support. Both elements of the international financial architecture are partly involved in providing an anti‐crisis and macroeconomic stabilization support at concessional terms. We demonstrate how the enlarged GFSN functions, including at the time of the COVID‐19 crisis.
In the global financial architecture, the functions of anti-crisis support and macroeconomic stabilization are performed by the institutions of the global financial safety net (GFSN). The volume of available financing within the framework of GFNS has grown 10 times over the past decade and reached the equivalent of 4% of world GDP. The literature’s standard understanding of a system of national reserves, swap agreements, regional financial mechanisms, and the IMF requires enlargement. The article proposes the concept of an enlarged global financial safety net, namely by including two new elements — multilateral development banks and bilateral financial support. The manifestations of this phenomenon in many regions of the world are shown in the activities of the largest international development banks and at the level of macroeconomic stabilization financing by individual donor countries, including during the current COVID crisis.
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