The Cost-benefit And Operational Mechanism Research Of The Brics Contingent Reserve Arrangement Based On The Perspective Of ILOLR

After the U.S.subprime mortgage crisis broken out,the spillover effects of changes in the western countries' monetary policy headed by the U.S.led to severe turbulence in the international financial market,also had a significant impact on monetary stability for emerging economies especially the BRICS.Because of the economic globalization and the imperfect existing international assistance system,considering the coordination of economic development between the BRICS and the infectivity of financial risks,in the form of " hold together for warmth" to strengthen the BRICS cooperation and coordination,can effectively alleviate the money stalemate and external imbalances.Under this background,the BRICS Contingent Reserve Arrangement arises at the historic moment.Scholars at home and abroad have given both praise and blame to its establishment,so it is necessary to quantitatively analyse the possible costs and benefits generated by CRA from the perspective of economics,in order to determine the overall significance of the CRA.In view of the current research of the Contingent Reserve Arrangement by domestic and foreign scholars,there are very few to conduct a comprehensive analysis of the costs and benefits for its establishment and how to operation effectively on the view of ILOLR.This paper carries on the base of definition for costs and benefits of the international lender of last resort,delves into its optimal behavior choice and institutional arrangement,using this theory to quantitatively analyse the possible costs and benefits of CRA as a regional ILOLR,provides a strong basis for action to the establishment and continuous operation for CRA.Through comparing the advantages and disadvantages of the current most representative contingent reserve arrangements—IMF and the Chiang Mai Initiative Multilateralization(CMIM)operational mechanism to provide experience for the BRICS,finally we put forward policy suggestions for design of CRA operational mechanism.Specifically include: fund-raising mode for actively exploring auxiliary funding sources on the premise of reducing cost,gradually decouple with the IMF lending conditions and set it with the characteristics of the BRICS,adjust the amount of loans with the increase of member countries and take the implicit price or appropriate floating interest rates of loans,warning and monitoring mechanism to emphasize prior data evaluation in order to prevent the crisis and tracking supervision approaches during and after the event to effectively prevent the risk of moral hazard.