RESERVE CURRENCIES. AN IMPORTANT SPEECH BY VLADIMIR PUTIN
. "Prime Minister Vladimir Putin’s speech at the opening ceremony of the World Economic Forum"

Very interesting speech yesterday by Mr. Putin in Davos. The Russian Prime Minister mentioned the economic risks posed by protectionism and by an excessive involvement of the state. He also had this to say about globalization: "Regardless of their political or economic system, all nations have found themselves in the same boat". But the key point, in my view, is the reference to the fragility of the international monetary system based on a key reserve currency. It's Jacques Rueff all over again — but this time from Moscow:

Excessive dependence on a single reserve currency is dangerous for the global economy. Consequently, it would be sensible to encourage the objective process of creating several strong reserve currencies in the future. It is high time we launched a detailed discussion of methods to facilitate a smooth and irreversible switchover to the new model ... Most nations convert their international reserves into foreign currencies and must therefore be convinced that they are reliable. Those issuing reserve and accounting currencies are objectively interested in their use by other states. This highlights mutual interests and interdependence. Consequently, it is important that reserve currency issuers must implement more open monetary policies. Moreover, these nations must pledge to abide by internationally recognised rules of macroeconomic and financial discipline.