International Monetary Fund

Financial Deepening, Macro-Stability, and Growth in Developing Countries

Financial Deepening, Macro-Stability, and Growth in Developing Countries

Date: Monday, September 24, 2012

Place: IMF HQ2 Conference Hall 1
1900 Pennsylvania Ave., N.W. Washington D.C.

The International Monetary Fund, jointly with the World Bank, the Consortium for Financial Systems and Poverty, and the UK Department for International Development held a conference Financial Deepening, Macro-Stability, and Growth at the IMF headquarters in Washington DC on September 24, 2012.

The conference was intended to provide a forum for discussing research on financial deepening issues in emerging market and low-income countries and to facilitate the exchange of views among researchers and policymakers. Robert Townsend (MIT) delivered the Keynote address.

The conference was open to the public and registration was required. For questions regarding the conference, please send an email to

Conference Webcast

Opening Remarks, Keynote Speech, and Session 1
Session 2
Lunch remarks and Session 3
Panel Discussion


Financial Deepening, Macro-Stability, and Growth in Developing Countries

Monday,  September 24, 2012

IMF – HQ2 Conference Hall 1
1900 Pennsylvania Ave., N.W.  Washington DC

8:30-9:00  AM

Registration and Continental Breakfast

9:00–9:15  AM

Opening Remarks
Zhu Min, Deputy Managing Director (IMF)

9:15–9:45 AM

Keynote speech
Robert Townsend Keynote Presentation

Robert Townsend (MIT)
Introduction by: Olivier Blanchard (Economic Counselor and Director, Research Department, IMF)

9:45–11:15 AM

Session 1: Finance, Macroeconomic Policy Choices, and Outcomes
Chair: Jose Vinals (Financial Counselor and Director, Monetary and Capital Markets, IMF)

Do the World’s Central Banks React to Financial Markets?
Klaus    Schmidt-Hebbel Paper
Presenter: Klaus Schmidt-Hebbel (Catholic University of Chile/Central Bank of Chile), and Francisco Muñoz (Catholic University of Chile)

Financial Sector Ups and Downs and the Real Sector: Up by the Stairs and Down by the Parachute
Joshua Aizenman Presentation Joshua Aizenman Paper
Presenter: Joshua Aizenman (University of California-Santa Cruz), Brian Pinto (World Bank), and Vladyslav Sushko (Bank for International Settlements)

Finance-Growth Nexus: Do All Countries Benefit Equally?
Adolfo    Barajas Presentation Adolfo    Barajas Paper
Presenter: Adolfo Barajas (IMF), Ralph Chami (IMF), and Reza Seyed Yousefi (University of Texas-Austin)

11:15–11:30 AM

***Coffee Break***

11:30–1:00 PM

Session 2: Benchmarking Financial Development
Chair: Antoinette Sayeh (Director, African Department, IMF)

Financial Possibility Frontier: Understanding Structural and Policy Gaps in Financial Systems
Thorsten    Beck Presentation
Presenter: Thorsten Beck (Tilburg University)

Resolving the African Financial Development Gap: Cross-Country Comparisons and a Within-Country Study of Kenya
Franklin Allen Presentation  Franklin Allen Paper
Presenter: Franklin Allen (University of Pennsylvania), Robert Cull (World Bank), Elena Carletti (European University Institute), Jun Qian (Boston College), Lemma Senbet (University of Maryland), and Patricio Valenzuela  (European University Institute)

Why Doesn’t Technology Flow from Rich to Poor Countries?
Jeremy    Greenwood Presentation Jeremy    Greenwood Paper Jeremy    Greenwood Paper
Jeremy Greenwood* (University of Pennsylvania), Harold Cole (University of Pennsylvania), Juan M. Sanchez (Federal Reserve Bank of St. Louis)

1:00–2:30 PM

Ross    Levine Presentation
Speaker: Ross Levine (University of California-Berkeley)

2:30–4:00 PM

Session 3: Financial Deepening and the Role of Government
Chair: Masood Ahmed (Director, Middle East and Central Asia Department, IMF)

Role of the State in Finance
Asli Demirg-Kunt Presentation Asli Demirg-Kunt Paper
More information on Asli Demirgüç-Kunt presentation

Presenter: Asli Demirgüç-Kunt, Martin Cihak (both World Bank)

The Macroeconomics of Microfinance
Joseph    Kaboski Presentation Joseph    Kaboski Paper
Presenter: Joseph Kaboski (University of Notre Dame), Francisco Buera (University of California-Los Angeles), Yongseok Shin (Washington University in St. Louis and Federal Reserve Bank of St. Louis)

Fragile By Design: Banking Crises, Scarce Credit, and Political Bargains
Stephen Haber Presentation
Presenter: Stephen Haber (Stanford University) and Charles Calomiris (Columbia University)

4:00–4:15 PM

***Coffee Break***

4:15–5:30 PM

Policy Panel Discussion

Moderator: Lemma Senbet (University of Maryland)

Panelists: Ross Levine (University of California-Berkeley), Franklin Allen (University of Pennsylvania), Mr. Zhu Min, Deputy Managing Director (IMF), James Scriven, Acting VP, Global Industries and Director, Global Financial Markets (IFC), Robert Townsend (MIT)

6:00 PM


IMF-HQ1 Events Hall
By invitation only


Era Dabla-Norris (IMF)
Kenichi Ueda (IMF/CFSP)
Martin Cihak (World Bank/IMF)

Conference Coordinators:
Carla Intal and Neri Gomes