The global financial safety net (GFSN) is an essential pillar for supporting a well- functioning international financial architecture. There are two challenges for the GFSN: the uneven geographical coverage and the provision of efficient coordination between its elements. First, the uneven and geographically fragmented coverage of the GFSN’s regional layer remains an issue. Regional financing arrangements (RFAs) are currently operational in Asia-Pacific, post-Soviet Eurasia, Europe, Latin America, and the Middle East. Effectively, the RFAs currently do not cover most of Africa, including Sub-Saharan Africa, as well as significant parts ofEurasia and Latin America, while all ofthese regions and sub-regions are prone to sizeable shocks. These challenges should be addressed by the variety of measures to be discussed in the policy brief. They include the following. First, defining the taxonomy of instruments and resources. Second, increasing the capacity ofthe regional GFSN layer (RFAs). Third, widening geographical coverage of existing RFAs as well as, specifically, establishing an RFA for Africa. The G20 could review stabilization financing that is channeled through the non-GFSN institutions and consider an optimal allocation ofresources between GFSN and other mechanisms. Second, coordination should be further enhanced both within GFSN and with other sources of stabilization financing, such as multilateral development banks. There are several low-hanging fruits within the GFSN coordination agenda. E.g., timely data collection and public availability are prerequisites for monitoring coverage and enhancing convergence of approaches. It will in turn help prevent overlaps and facility shopping. We suggest organizing data collection on a more regular and timely basis with due attention to an immediate public accessibility of data.
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