The international monetary system has not been successful in contributing to stable and high global growth while maintaining price and financial stability. Interconnection of financial markets, free cross-border financial transactions and interdependence of economies have expanded the effects of financial crises, resulting in global financial instability. Considering the difficulty of handling cross-border capital flows at the individual country level, international monetary coordination seems to be needed. For developing countries, cautious approach to capital account liberalization and active capital account management is required to maintain macroeconomic and financial stability. Central banks ought to move from narrow inflation targeting framework to multiple responsibilities framework and be involved with financial regulation and supervision in order to ensure price and financial responsibility with economic growth.
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