In addition to a number of issues associated with exchange rate volatility discussed in parts 2 and 3, a major set of international monetary issues concerns a perceived lack of control over the volume of international liquidity, both official and private, and the prospects for increased monetary instability resulting from an accelerated trend toward a multiple currency reserve system.
It has been argued that the Second Amendment to the International Monetary Fund (IMF) Articles of Agreement, which officially sanctioned the new international monetary system based on flexible exchange rates, was dangerously deficient in not paying sufficient attention to these issues. Some proposals for further reforms of the international monetary system include the restoration of some form of convertibility of currencies into international reserve assets and other methods of greater international control over official international reserve holdings, international regulation of the Eurocurrency markets, and the creation of a substitution facility in the IMF to convert current holdings of dollars into special drawing rights (SDR) with the hope of thus enhancing the role of the SDR and at the same time reducing the incentives for switching from dollars into other currencies, such as the deutsche mark or the yen.
These issues are discussed in parts 4 and 5. Part 4 concentrates on international regulation of official international liquidity and of the Eurocurrency markets. The problem of control of official liquidity is considered by John Williamson. The remaining three papers deal with the issue of international regulation of Eurocurrency markets. The first of them, "The Need for Control over the Eurocurrency Market" by Henry C. Wallich, is an abridged version of his testimony of July 12, 1979, before the Subcommittees on Domestic Monetary Policy and International Trade, Investment, and Monetary Policy of the House Committee on Banking, Finance, and Urban Affairs. This paper was not presented at the conference itself, but Governor Wallich kindly agreed to have it included in the present volume. In the editors' judg-