the conference, published in March 2004
IMF Seminars, Conferences and Workshops
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Challenges to Central Banking from Globalized Financial Systems |
Conference organized by the IMF Monetary and Exchange Affairs Department and the IMF Institute
Meeting Halls A & B
September 16–17, 2002
The objective of the conference was to assess new challenges to central banking posed by the globalization of financial systems in industrial and emerging market economies. Globalization has produced larger, faster-moving, and more integrated financial markets and systems. Central banks are now grappling with new and difficult policy challenges generated by this more dynamic financial environment.
Against this background, the first day of the conference was on monetary and exchange rate policies and included sessions on the role of the central bank in a highly dollarized economy, monetary unions, inflation targeting for emerging market economies, and the central bank's role in debt and reserve management. The second day of the conference was on financial stability and included sessions on stability as an explicit central bank policy objective, using macroprudential indicators, and the role of the central bank in a financial crisis.
Conference papers will be posted on this website as soon as they become available.
Program (Use the free Adobe Acrobat Reader
to view PDF files.)|
Monday, September 16
|Monetary and Exchange Rate Policies under Integrated Capital Markets|
|9:00 a.m.–9:30 a.m.||Opening Remarks by Mr. Eduardo Aninat,
Deputy Managing Director
Introduction by Mr. Stefan Ingves, Director IMF Monetary and Exchange Affairs Department, and Mr. Mohsin Khan, Director IMF Institute
|9:30 a.m.–10:45 a.m.||Session 1: The Role of the Central Bank in
a Highly Dollarized Economy
Chair: Mr. Alfredo Leone, Assistant Director, IMF Monetary and Exchange Affairs Department
Presenter: Mr. Richard Webb, Governor Banco Central de Reserva del Peru
Discussant: Mr. Alain Ize, Advisor, IMF Monetary and Exchange Affairs Department Bank
Dollarization can greatly complicate monetary policy implementation and the preservation of financial stability. How should monetary management be designed in the context of a limited role of domestic currency? How does dollarization alter systemic financial risks?
|10:45 a.m.–11:15 a.m.||Coffee break|
|11:15 a.m.–12:30 p.m.||
Session 2: Regional Monetary Arrangements
Chair: Ms. Anne-Marie Gulde, Division Chief, IMF Monetary and Exchange Affairs Department
Presenter: Mr. Gert Jan Hogeweg, Director General Economics, European Central Bank
Discussant: Mr. K. Dwight Venner, Governor Eastern Caribbean Central Bank
A monetary union is one of the "corner solutions" of exchange rate regimes (hard pegs versus flexible exchange rates) for countries open to international capital flows. What are the major challenges on the road to monetary union? What institutional arrangements can ensure the functioning of a monetary union (e.g. convergence criteria, fiscal rules)? How can monetary policy be conducted in the union?
|12:30 p.m.–2:30 p.m.||Luncheon (by invitation)|
|2:30 p.m.–3:45 p.m.||
Session 3: Inflation Targeting "Lite"
Chair: Mr. Warren Coats, Assistant Director, IMF Monetary and Exchange Affairs Department
Presenter: Mr. Mark Stone, Senior Economist, IMF Monetary and Exchange Affairs Department
Discussant: Mr. Jerzy Pruski, Member of the Monetary Policy Council, National Bank of Poland
Less formal variations of inflation targeting could be appropriate for smaller, less open emerging market countries unable to adopt an intermediate exchange rate regime and not wanting to adopt a currency board. What are the minimum prerequisites for a monetary policy guided by inflation targets? How can monetary policy be implemented under such a framework?
|3:45 p.m.–4:15 p.m.||Coffee break|
|4:15 p.m.–5:30 p.m.||
Session 4: The Central Bank's Role in Debt and Reserve Management
Chair: Mr. Bernard Laurens, Deputy Division Chief, IMF Monetary and Exchange Affairs Department
Presenter: Mr. Hugo Frey Jensen, Assistant Director and Head of the Capital Markets Department, Danmarks Nationalbank
Discussant: Mr. Michael Reddell, Head of Financial Markets, Reserve Bank of New Zealand
Recent experience has shown that public debt and reserve management can not only enhance monetary policy but also improve financial stability. Should the central bank or separate debt and reserve management agencies take the lead in managing government debt? How is monetary policy and debt and reserve management best coordinated? If a central bank takes the lead, what is its role in ensuring a sustainable level of debt and its targets of monetary policy?
|6:00 p.m.–7:30 p.m.||Reception|
|3:45 p.m.–5:00 p.m.||Continuation|
|Tuesday, September 17||The New Challenges to Financial Stability|
|9:00 a.m.–10:15 a.m.||Session 5: Should Financial Stability be an
Explicit Central Bank Objective?
Chair: Mr. Hassanali Mehran, Senior Advisor, IMF Monetary and Exchange Affairs Department
Presenter: Mr. Roger W. Ferguson Jr., Vice Chairman of Board of Governors of the Federal Reserve System
Discussant: Mr. André Icard, Deputy General Managing Director, Bank for International Settlements
Financial instability owing to its real costs can be a goal of monetary policy in addition to the principal objective of price stability. How can the central bank conduct policy in support solely of financial stability without impairing price stability? What is the role of a preset policy response? How does the choice between bank supervision by a unified agency or by the central bank bear on financial stability as a monetary policy goal?
|10:15 a.m.–11:45 a.m.||Coffee break|
|10:45 a.m.–12:00 p.m.||
Session 6: Using Financial Soundness Indicators to Assess Financial Stability
Chair: Mr. Mark Swinburne, Division Chief, IMF Monetary and Exchange Affairs Department
Presenter: Mr. V. Sundararajan, Deputy Director, IMF Monetary and Exchange Affairs Department and Mr. R. Sean Craig, Senior Economist, IMF Monetary and Exchange Affairs Department
Discussant: Mr. Jarle Bergo, Deputy Governor Norges Bank
Greater appreciation of the role of financial surveillance has led to increased reliance on Financial Soundness Indicators (FSIs) by central banks. This has given rise to a number of questions: What are the uses and limitations of the different FSIs? How should FSIs be used in combination with other surveillance tools? In what ways does financial sector surveillance using FSIs contribute to central banks' capacity to fulfill their mandate? And, how are FSIs used in the context of the IMF's Financial Sector Assessment Programs (FSAP)?
|12:00 p.m. –2:00 p.m.||Luncheon (by invitation)|
|2:00 p.m.–3:15 p.m.||
Session 7: The Role of Central Banks in Financial Crises
Chair: Mr. Stefan Ingves, Director, IMF Monetary and Exchange Affairs Department
Presenter: Mr. Mario Blejer, former Governor Banco Central de la Republica Argentina
Discussant: Mr. Kyu Yung Chung, Director General, Research Department, Bank of Korea
In a globalized world financial crises can be triggered by country-specific problems (Argentina, Indonesia, etc.) and potentially by extraordinary global events (September 11, Y2K, etc.). What are the primary challenges in a crisis? Under what circumstances should central banks take a leading role in crises and what should be their role? Should crisis policies be established ahead of time?
|3:15 p.m.–3:45 p.m.||Coffee break|
|3:45 p.m.–5:00 p.m.||
Roundtable Session: Key Lessons from the Conference
Chair: Mr. Mohsin Khan, Director IMF Institute
Mr. Francis Chu, Chief Representative, Hong Kong Monetary Authority, New York Representative Office
Mr. Brian Kahn, Head Monetary Policy Research, South African Reserve
Mr. Stefan Ingves, Director IMF Monetary and Exchange Affairs Department