World Anti-Crisis Conference
Organizer: the Government of the Republic of Kazakhstan, EECSA
Conference and whole discussion will be devoted to address the problems facing the global financial system. And suggest some proposals during the discussions.
- Conference and whole discussion will be devoted to address the problems facing the global financial system. And suggest some proposals during the discussions.
SESSION I - A DECADE OF ADJUSTEMENT AND UNEMPLOYMENT IN THE EUROZONE? THE POLITICAL AND ECONOMIC DIMENSION
Over the last three years, Europe has been dealing with a major banking, economic, fiscal and political crisis. Uncertainty still prevail about capacity to resolve once for all the Eurozone crisis and to move towards a path for a more genuine monetary union. Deleveraging of the banking and public sector is not happening and it is very slow compared with the USA questioning the capacity of European countries to withstand economic shocks. unemployment is reaching level unprecedented since world war 2 in Spain, Portugal, Italy, France with no end in sight. Europe is a turning point. Should countries commit to the age of Austerity? what is the appropriate pace between fiscal consolidation and growth ? What are the political consequences. Are we facing with a major crisis of legitimacy?
SESSION II - ASSESSMENT OF MONETARY POLICIES AND THEIR CONSEQUENCES FOR GLOBAL FINANCIAL STABILITY
- Is the world dealing with a devastating “currency wars” as profound as the one experienced during the interwar years ? Is debasing the currency is the trend of the day, This session will first present evidence that currency war is underway in the global economy. What should be the solutions to prevent competitive devaluations and beggar neighbor policies ?what kind of reform of the international monetary system , the world should propose to make the system less asymmetrical and take into account the emergence of a multipolar world with multiple currencies ?Many of the countries that avoided the financial crisis are experiencing uncomfortably high exchange rates and low interest rates. With the major economies of the world quite weak, most other countries would see themselves as benefiting from a lower exchange rate to boost their exports. But, of course, given that exchange rates are relative prices, not every country can simultaneously have a lower exchange rate. It should not really come as a surprise that countries that are in relatively good shape and have not seen large-scale expansion of the central bank balance sheet are experiencing stronger currencies than those that are in relatively poor shape. This is one of the mechanisms through which the weak conditions in most of the advanced economies are transmitted to the rest of the world. And in response to this, interest rates are lower than they otherwise would be to offset some of the effects of an uncomfortably high exchange rate. With the breakdown of the Bretton woods system, the international monetary system lost the anchor with the fixed exchange rate regime, it seems that the global financial system is losing confidence with the anchor that was the mantra and panacea of central banks over the last two decade with inflation targeting. Are we on a major reconfiguration of the role of monetary policies in the western world ?is the concept of central bank independence significant today? What will be best way to exit non standard measures happening in the USA, UK and Japan.
SESSION – III GLOBAL CAPITAL MARKETS IN TRANSITION: SHIFT FROM GLOBAL TO LOCAL?
Since the Great Recession, the global financial system and all the actors are facing a major transition. It is still hard to grasp the real magnitude of the changes that our financial systems are undergoing. In fact, the international community is still trying to restore the financial channels to support the growth of internal and external demand. In taking a step back and look at how the contours of our economic and financial landscape is evolving should be an item to introduce the debate on anti-crisis conference.
We can already distinguish some of the characteristics of the new scenario that is taking shape, and will have major ramifications for policy makers, central banks, regulators, financial intermediaries in the years to come.
It seems that one trend is towards disintermediation and a more important role of capital markets, gaining ground to banks, in a global financial system that will probably end up being smaller and more attuned to the size of the global economy.
Another trend points to a reduction of financial linkages between national financial systems, as BIS banking statistics, for example, are starting to show. Here, the role of Central Banks’ policies and operations, as well as regulators is crucial, as they must walk a fine line in promoting domestic financial stability without falling into the nets of protectionism, something that would be indeed damaging for growth and prosperity.
Another challenge to address is the risk of fragmentation and re-nationalization of the financial system has materialized at the European level, in the unique institutional context of European Monetary Union; and the solutions to overcome this situation are changing the foundations of the euro.
We are also seeing growth rates in the emerging world and the increasingly importance of the development of capital markets, with the development of local bond markets in local currencies and the deepening of the financial sector.
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