Finance and Credit

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Institutional barriers to currency competition in the international monetary system

Vol. 25, Iss. 10, OCTOBER 2019

Received: 28 August 2019

Received in revised form: 11 September 2019

Accepted: 25 September 2019

Available online: 30 October 2019


JEL Classification: F31, F33, F34

Pages: 2341–2358

Kuznetsov A.V. Financial University under Government of Russian Federation, Moscow, Russian Federation

Subject The article investigates the impact of informal institutions of the international financial market on the competition of currencies in the international monetary system.
Objectives The purpose is to systematize the main tools and mechanisms for creation, distribution and management of global financial resources in the context of the US dollar dominance in the key segments of the international monetary system.
Methods I employ general scientific methods of systems analysis, analogy, modeling, and scientific abstraction.
Results The paper summarizes approaches to the definition of the modern international monetary system, discusses reasons for the dominance of the US dollar in various segments of the international monetary system, presents the system of interconnected and interdependent informal institutions of the international financial market that limit the competition of currencies and the creation of a multipolar currency system.
Conclusions In conditions of floating exchange rates and liberalized financial markets, the world monetary system is unable to equally perform its main international functions to mobilize savings, allocate credit resources and manage financial flows in the interests of the entire world community. Despite numerous problems of the US financial system and competition from other centers of the world economy (euro area, Japan, China), the US dollar continues to occupy leading positions in all segments of the international financial market. This situation requires a fundamental integrated approach to designing alternative reserve and payment systems for developing countries and emerging markets.

Keywords: institutional framework, international monetary system, informal institution, international financial market


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