the creation of an International Monetary Policy Committee composed of representatives of major central banks that will report regularly to world leaders on the aggregate consequences of individual central bank policies.
While this is still recommendatory in nature, it has pricked a few ears already. The implied loss of sovereignty is the usual contentious issue. However there are a few issues.
The global nature of banking and finance implies that regulatory and policy mechanisms be equally global. Such realities compel a kind of global cooperation that may not work without appropriate legal support. The financial system, in this regard, has become similar to international navigation, global climate or such other global systems.
The legal support, possibly in the form of treaties accepting the global policy direction, may indeed reduce the sovereign freedom a nation enjoys.
A solution, I believe, will be to create a global monetary policy with a new two-level global currency system. This system should allow the national central bankers to create a monetary policy based on specific national requirements.
The global currency to signal confidence in national monetary policies. Each national currencies will be valued in terms of a global currency based on various factors. One of the factors will be their alignment with global monetary policy. Thus a country that has a relatively expansionary policy will see a currency devaluation.
Such system incorporates, to my mind, the benefits of a gold based currency system while limiting (or possibly eliminating) its deflationary effects.