Defects of Jamaican system:
(1) The management of reserve currency is complicated, and various reserve systems are inherently unstable. Under the diversified international reserve pattern, what else do reserve currency issuers enjoy? Seigniorage? And other benefits, while the lack of a unified and stable monetary standard, which in itself may cause international financial instability;
(2) Exchange rate discipline no longer exists. The exchange rate fluctuates greatly and the exchange rate system is extremely unstable. One of its negative effects is to increase the foreign exchange risk, thus inhibiting international trade and investment activities to a certain extent, especially for developing countries;
(3) The balance of payments adjustment mechanism is not perfect, and the existing channels have their limitations. The Jamaican system has not eliminated global imbalances. At present, the task of balance of payments adjustment mostly falls on deficit countries, and the Jamaican system has not learned the lessons of the Bretton Woods system and established a system to restrain or help deficit countries recover their balance of payments.
(4) Due to the diversification of reserve currency and exchange rate arrangements, the sources of currency crisis and international financial crisis are also diversified, but the Jamaican system lacks effective subjective or objective crisis early warning indicators and cannot prevent crises.
Since the establishment of Jamaica system, there have been many crises in the international market, and there have been constant calls for reforming the current international monetary system, and various ideas are also in the discussion stage.
The international financial crisis stems from the excessive innovation of international finance and the lack of transparency and effective supervision. Under the Jamaican system, the established capital countries have developed a set of developed financial systems that are beneficial to themselves and far away from the real economy by using the chaotic monetary system. Taking advantage of its status as an international currency, the US dollar levies seigniorage, which constrains the global economy.
In view of this, some proposals for reforming the international monetary system believe that the current Jamaican system should be adjusted and reformed to increase the share of other currencies and the role of SDR; Implement regional testing and policy coordination; Establish an effective debt handling plan to prevent debt crisis. There are also some plans that a new and more binding international financial coordination institution should be established and strict exchange rate and balance of payments discipline should be returned.