Managing Director’s Welcoming Remarks at the Camdessus Lecture with Mario Draghi
IMF News, May 14, 2015
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Bibliographic details
- Published: May 14, 2015
Event and context
- Occasion: the second Michel Camdessus Lecture on central banking.
- Date on page: May 14, 2015.
- Speaker introduced: President of the European Central Bank, Mario Draghi.
- Purpose: reflect on challenges central banks face in the aftermath of the global financial crisis and highlight the IMF’s commitment to collaborate with central banks.
Assessment of the global recovery and monetary policy
- Growth divergence and asynchronous monetary policy across major economies:
- Further easing in the euro area and Japan.
- The United States and the United Kingdom on the path toward normalization.
- Exchange rate and market developments:
- The dollar has appreciated, while the euro and yen have weakened.
- Market volatility has increased from historical lows, with rising risk spreads and currency depreciation in some emerging markets.
- Financial stability risk rotation:
- From advanced economies to emerging markets.
- From banks to the non-bank financial sector.
- From solvency risks toward market liquidity risks.
- Downside scenario highlighted:
- A “new mediocre” — defined as low growth for a long time — remains a distinct possibility.
Policy recommendations to avoid a “new mediocre”
- Monetary policy:
- Continues to have an important role; explicit support expressed for the ECB’s actions.
- Noted: “the significant further easing of monetary policy in January of this year has done much to stave off the threat of deflation and support weak demand.”
- Emphasis: monetary policy and price stability are essential for strong, sustainable, and inclusive growth.
- Complementary measures beyond monetary policy:
- Structural reforms to unleash productive potential (examples: streamline regulations in labor and services markets).
- Fiscal consolidation should be designed to protect the capacity of the poor and vulnerable to fully contribute to the economy and society.
- Estimated impact in advanced economies: more efficient fiscal policy could increase the long run growth rate by one third of a percentage point per annum.
- Increase opportunities for women:
- By some estimates, equal female labor force participation with men would raise GDP by 5 percent in the U.S. and 9 percent in Japan.
- Broad push for more inclusive growth:
- IMF initiative launched to cover jobs, inequality, gender, and energy issues in surveillance of member countries’ policies.
- Active engagement in the sustainable development agenda.
Leadership, praise for Mario Draghi, and introduction
- Leadership in crisis emphasized as crucial; Mario Draghi singled out for demonstrated leadership.
- Career highlights cited for Mario Draghi:
- Director of the Italian Treasury.
- Vice Chairman and Managing Director at Goldman Sachs.
- Governor of the Bank of Italy.
- Chairman of the Financial Stability Board.
- President of the European Central Bank since 2011.
- Closing: invitation for Mario Draghi’s lecture and subsequent conversation on major challenges facing central banks.
Managing Director’s Welcoming Remarks at the Camdessus Lecture with Mario Draghi