2017 Michel Camdessus Central Banking Lecture Series: Managing Director's Opening Remarks

IMF News, September 18, 2017

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Authors: Christine Lagarde
Published: September 18, 2017

Overview

Title: 2017 Michel Camdessus Central Banking Lecture Series: Managing Director's Opening Remarks
By Christine Lagarde, IMF Managing Director
Location and date: IMF HQ, Washington, DC, September 18 2017
As prepared for delivery
Contact listed: Phone: +1 202 623-7100 Email: MEDIA@IMF.org

Key framing: "The Hockey Game"

Central metaphor: the aftermath of the global financial crisis compared to an Olympic level hockey game.
Timing and status:
- This is the "fourth Michel Camdessus Lecture".
- The game is described as "well into the second period" with central banks and other institutions "up in favor" for now.
- Caution that "the game is not over yet—after all, hockey has three periods!"
Achievements credited to policy responses:
- "the crisis was overcome"
- "a deflationary spiral avoided"
- "a broad-based global recovery is underway"
- Referred to as "A hat trick of sorts."
Outstanding tasks:
- "The unconventional and extraordinary policy measures taken during the crisis have yet to be unwound."
- "Policy and regulatory frameworks need to be further refined."
- "Lessons from the crisis need to be learned and remembered."

Three uncertainties highlighted

First uncertainty: basic economic mechanisms
- Questions raised:
- "What are the precise mechanisms that have underpinned the recovery and how robust is the current upswing?"
- Why inflation remains subdued—both headline and core—despite very low unemployment in some countries (United States and Japan).
- Whether the Phillips curve "has become flatter?"
- Questions about the level of the equilibrium interest rate in normal times, the so called 'natural rate' — "has this rate fallen from prior levels? If so, by how much?"
- Policy implications: "Do they allow for slower increases of interest rates? And at what level of interest rates is the 'normalization' complete?"
- "To what extent monetary policy should worry about asset prices and financial stability."
Second uncertainty: national politics and international relations
- Example given: "uncertainty over the modalities and economic impact of Brexit."
- General question: "How should policymakers deal with these big question marks?"
Third uncertainty: rapid technological change (fintech and electronic payments)
- Questions raised:
- "Will digital currencies compete with fiat money and reduce the effectiveness of traditional monetary transmission?"
- "How would this impact central banks’ ability to influence employment and inflation?"
- "How will they safeguard financial stability?"
- "To what extent should central banks embrace fintech?"

Characterization of the speaker: "The Goalie: Mark Carney"

Rationale for selecting Mark Carney as speaker/“goalie”:
- Attributes sought: "an able pair of hands, good reflexes, a cool head, and strategic thinking."
- Mark Carney described as having those qualities.
Professional background and accomplishments (as stated):
- Former Harvard team goalie (anecdotal), chose not to pursue NHL career.
- Governor of the Bank of England; chair of the Financial Stability Board.
- Early career: worked as a bank teller while in university; then as an investment banker at Goldman Sachs; later joined the public service team.
Central banking record:
- As Governor at the Bank of Canada: "deftly navigated the global financial crisis, including with proactive rate cuts—underpinning a stronger recovery in Canada than in most other advanced economies."
- As Governor of the Bank of England: "advanced the macroprudential policy agenda and led a robust monetary policy response after the Brexit referendum."
Global leadership and regulatory work:
- As FSB Chair: "pushed strongly for an effective Basel III and other regulatory reforms" and "get consensus on controversial matters and move the agenda forward."
Innovation and institutional change:
- Credited with changes to the institutional design of the Bank of England "to make the institution more flexible and responsive to new challenges."
- Bank intellectual leadership cited on "fintech and climate change."
Quotation on strategic foresight:
- Wayne Gretzky quote quoted in context: "A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be."
- Conclusion: "Put simply, Mark is a great player."

Closing and agenda for the lecture series event

Speaker invitation and expectations:
- Christine Lagarde: "I am deeply honored, Mark, that you have accepted our invitation to deliver the fourth Michel Camdessus Lecture."
- Audience expectation: "All of us here look forward to hearing your thoughts on monetary policy and central banking."
- Planned follow-up: "I also look forward to engaging with you in a conversation about the major challenges facing today’s central banks, after your remarks."
Final line: "The floor—or should I say, the ice—is yours!"

2017 Michel Camdessus Central Banking Lecture Series: Managing Director's Opening Remarks — By Christine Lagarde, IMF Managing Director (IMF HQ, Washington, DC, September 18 2017).