As financial markets continue trembling like jello, world leaders are considering some of the biggest changes to the global monetary system in more than 50 years.
Their aim: greater stability.
Suggestions range from the more conventional, such as a partial merger of the International Monetary Fund (IMF) and the World Bank, to the novel, such as the creation of an entirely new institution to oversee the flow of private capital around the world.
If adopted, the changes would mark a significant shift in a system that impinges on everyone from Des Moines to New Delhi.
While technocrats for months have weighed how to make the system move faster in the face of economic crisis, political leaders - most notably President Clinton and British Prime Minister Tony Blair - have more recently joined the reform chorus. Their involvement is seen as giving the reform efforts a big push.
Last week, Mr. Blair called for "a new international financial system for a new international financial age." He also spoke of [the need for] a "new Bretton Woods," a reference to the New Hampshire town where World War II allies met in 1944 to draft a postwar international economic plan.
His words echo those of Mr. Clinton, who earlier this month proposed a meeting of leading financial ministers and central bankers "to recommend ways to adapt the international financial architecture to the 21st century." Many of them will arrive in Washington late this week, in advance of the annual meeting of the IMF and the World Bank - two organizations created a half-century ago at Bretton Woods.
But is all the talk hot air? Is it just to show that Clinton and Blair are dealing with a world financial crisis that threatens the economies of both the United States and Britain?
New Bretton Woods
Maybe not, experts suggest.
"It requires a Bretton Woods II," says J. Paul Horne, a London-based economist for Salomon Smith Barney, an investment banking firm. He expects such a gathering in a year or two.
Under the current system for supervising and refereeing the world's economic activities, the IMF comes to the rescue of nations with severe international payment problems, and the World Bank provides development funds to poor countries.
The Blair and Clinton speeches, both made in New York, may be aimed at raising the level of discussion of changes that have been under way among monetary bureaucrats for months. They would like to dampen the current crisis reverberating from Asia to Russia to Latin America. Another goal is to make it more immune to future financial troubles.
Britain, according to the Financial Times of London, wants a partial merger of the IMF and the World Bank. The two agencies' activities overlap to some extent.
Moreover, one of Blair's advisers, Cambridge University economist John Eatwell, proposes creating a World Financial Authority aimed primarily at managing the private financial system - something that has never been done.
Last year, $174 billion of net private capital flowed into emerging markets, according to the IMF. The figure was $241 billion in 1996, before the Asia crisis.
Asia's woes are widely seen as having as much to do with the private financial system as with the adequacy of multilateral institutions such as the IMF.
"The Asian crisis is but the latest example of the real economic costs imposed by international financial liberalization," write Lord Eatwell and Lance Taylor, an economist at the New School for Social Research in New York.
In other words, domestic and foreign money leaving such nations as Thailand, South Korea, and Indonesia set off currency devaluations that left a trail of broken businesses and lost jobs.
Such dramatic changes in the system could take years to work out. There is not yet consensus among the Group of Seven industrial powers. "We have everybody shooting their mouth off," says Peter Kenen, a Princeton University economist. "I think Mr. Blair jumped the gun."
More likely for quick action are changes that appear mundane but are considered important by reformers. Some of these will be spelled out at a meeting in Washington next Monday by the so-called Group of 22. This consists of the major industrial nations, plus a number of developing countries such as India, Indonesia, China, and Russia.
Let's talk more
Among the likely suggestions of Group of 22 task forces: ways to give investors more information about borrowing institutions around the world, as well as better communication between the IMF and private agencies.
Another set of reforms will be urged by a task force of the Institute of International Finance (IIF) in Washington. It represents 295 of the world's largest financial institutions. The IIF's major recommendation will be closer consultation between these institutions - such as private banks and insurance companies - and governments and multilateral agencies.
Two of the issues at stake:
* The role of the IMF. It has come under attack by some intellectuals and Republicans on Capitol Hill for being wasteful and unnecessary. But it is a minority view among economists.
* Short-term capital flows. Sentiment is shifting toward allowing nations to restrain the inward movement of capital. But the Group of 22 is not expected to recommend such a move.