$name

IMF Seminars, January 1, 1901

Source details

Canonical URL: $name

Other formats

Bibliographic details

Published: January 1, 1901

Event overview and central concern

The event was a JOINT HIGH-LEVEL CONFERENCE BY THE BRAZILIAN AUTHORITIES AND THE IMF, Rio de Janeiro, Brazil, MAY 26-27, 2011.
Central analytical theme: Несинхронность и расходящаяся динамика восстановления могут поставить финансовую стабильность под угрозу — asynchronous and divergent recovery dynamics can threaten financial stability.
Framing: Capital flows to emerging market economies (EMEs) resumed after the sharp decline following the global financial crisis and are projected to remain high, although volatile, in the coming years.
Key risks highlighted:
- Many flows may reflect interest rate differentials that could be at least partially reversed when policy interest rates in advanced economies (AEs) return to more normal levels.
- A rapid reversal could occur if the global recovery falters and there is a renewed increase in global risk aversion.
- A history of "sudden stop" episodes suggests caution before interpreting recent inflows as a "structural break."
- Large inflows can lead to exchange rate appreciation pressures or overshooting, some loss of monetary policy independence, and costly reallocation of productive resources if inflows are temporary.
- Sudden surges can overwhelm domestic prudential frameworks and fuel asset price bubbles rather than finance productive investment.

Objectives and policy questions

Conference objective: Provide senior officials and academics an opportunity to debate root causes of the pickup in capital flows to EMEs, their impact, and appropriate policy responses.
Core policy questions:
- What determines surges and volatility of capital inflows?
- What role have macroeconomic policies in the U.S. and other advanced countries played?
- Are there differences between types of flows?
- Do recent inflows represent a structural “new normal” or reflect a failure to rebalance the global economy?
- How should theoretical benefits of capital flows be weighed against macroeconomic challenges and risks (diminished competitiveness, inflation and overheating, asset price bubbles/financial fragilities)?
- How does experience differ by country characteristics (exchange rate regime, fiscal institutions, quality of domestic supervision/regulation)?
- What is the policy hierarchy among macroeconomic, macroprudential, and capital control tools?
- To what extent should broader systemic consequences of policy instruments be factored into country choices?

Suggested policy elements and considerations

A policy response to a surge in capital inflows may need to include both macroeconomic and prudential elements.
Considerations emphasized:
- Use of macroeconomic policies to manage exchange rate pressures and overheating.
- Deployment of macroprudential measures to strengthen domestic prudential frameworks and limit asset price bubbles.
- Calibration and role of capital controls as part of the policy toolkit.
- Assessment of country-specific characteristics when choosing policy mixes (exchange rate regime, fiscal institutions, supervision/regulation quality).
- Recognition of potential temporary nature of inflows and the costs of reversal.

Program and agenda highlights (May 26–27, 2011)

Venue: Caesar Park Hotel, Rio de Janeiro.
Registration and keynote elements:
- Lunch speaker: Guido Mantega, Minister of Finance of Brazil.
- Introductory remarks: Alexandre Tombini, Governor, Banco Central do Brasil; Min Zhu, Special Advisor to the MD, IMF.
SESSION I — The Causes of the Recent Wave of Capital Inflows to Emerging Market Economies
- Chair: Cristiano Romero, Valor Economico.
- Speakers: Joyce Chang, JP Morgan Chase; José Antonio Ocampo, Columbia University; Eduardo Loyo, BTG Pactual; Hyun Song Shin, Princeton University.
- Focus: behavior of capital flows, determinants of surges and volatility, role of AE policies, distinctions across flow types, structural vs cyclical interpretations.
SESSION II — Capital Inflows: Blessing or Curse?
- Chair: Stephanie Flanders, BBC.
- Speakers and contributions: Paulo Nogueira Batista, Executive Director, IMF; Nicolás Eyzaguirre, IMF; Roberto Frenkel, University of Buenos Aires; John Williamson, Peterson Institute for International Economics.
- Focus: transmission channels to real and financial sectors, weighing benefits against risks (competitiveness loss, inflation, overheating, asset bubbles), cross-country differences by institutional characteristics.
- Dinner speaker: Jagdish Bhagwati, Columbia University.
SESSION III — How Should EMEs Manage Rapid Inflows?
- Chair: Zanny Minton-Beddoes, The Economist.
- Speakers: Kristin Forbes, Massachusetts Institute of Technology; Jonathan D. Ostry, IMF; Subir Vithal Gokarn, Deputy Governor, Reserve Bank of India; Olivier Jeanne, Johns Hopkins University.
- Policy Forum: Regional Perspectives on Managing Capital Inflows
- Moderator: Adriana Arai, Bloomberg.
- Panelists: José De Gregorio, Governor, Central Bank of Chile; Turalay Kenç, Vice Governor, Central Bank of Turkey; José Uribe, Governor, Banco de la Republica de Colombia; Atchana Waiquamdee, Deputy Governor, Bank of Thailand.
- Tentative Conclusions: Nelson Barbosa Filho, Exec. Sec., Min. of Finance, Brazil, and Olivier Blanchard, IMF.
Adjournment followed by a press briefing.
Attendance: by invitation only.

Content in this bundle

References

Несинхронность и расходящаяся динамика восстановления могут поставить финансовую стабильность под угрозу