Knot makes case for ‘international monetary diplomacy’

Klaas Knot has said he does not believe that everything is doom and gloom for the international financial order.

In a speech on February 14, the Netherlands Bank (DNB) governor called for “monetary diplomats who combine economic and diplomatic skills, and who can speak with authority”.

Knot, who also chairs the Financial Stability Board, emphasised that key international institutions, such as the International Monetary Fund, must continue to exist. He said such bodies were “important pillars” of the functioning of the international financial rules-based order.

“The IMF and the World Bank have a crucial role to play in a world that is threatened by fragmentation,” he said, as they were “best positioned to keep some order in the world economy”. These institutions could warn against the global impact of trade wars and economic isolationism, as well as the consequences of climate change, he added.

Despite signs of fragmentation, Knot proclaimed that “multilateralism is not dead”.

“My personal experience as chair of the Financial Stability Board is that, despite the challenging international political situation, the commitment to keep working together on financial stability issues is still there,” he said.

The most important challenges for financial stability, he added, were “precisely the cross-border issues” that could only be solved co-operatively.