Any attempts by the U.S. to deal with China's currency situation are complicated by the fact that the country is the single largest foreign holder of U.S. debt. As of November 2009, China held nearly $800 billion worth of U.S. securities and bonds.

Collyns was questioned on his views about China's currency during his Senate confirmation hearing in late 2009. He asserted the need for a concerted effort to persuade China to shift its fiscal policy in a new direction.

"If the Chinese maintain [current policies] it will block the adjustment needed of the global economy, the adjustment that China needs to make to shift away from export leg growth toward domestic leg growth," Collyns said.

Economic Crisis Management

Collyns laid out his views on the proper response to an economic crisis in an article for F&D, the quarterly magazine of the IMF. In the piece, Collyns strongly advocated for direct government intervention during times of great economic upheaval. "The first and most important lesson from every financial crisis since the Great Depression is to act early, to act aggressively, and to act comprehensively to deal with financial strains," Collyns wrote.

Collyns asserted that fiscal stimulus is necessary to combat economic downturns, but cautioned that underlying problems in a financial system must be dealt with in order for a full recovery to occur. Citing examples from history, Collyns also asserted the need for global policy solutions to keep financial problems contained. "The bottom line is that by learning lessons from experience, we can avoid the worst of the past," Collyns wrote.

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