The 2nd Joint Regional Financing Arrangement (RFA) Research Seminar

2018-09-29T21:02:17+00:00May 14, 2018|Events|

The 2nd Joint Regional Financing Arrangement (RFA) Research Seminar

Date & Time: Thursday and Friday, May 17-18, 2018

Location: Santa Teresa Hotel, Cartagena de Indias, Colombia

Contact: enquiry@amro-asia.org

The 2nd Joint Regional Financing Arrangement (RFA) Research Seminar co-organized by the ASEAN+3 Macroeconomic Research Office (AMRO), the European Stability Mechanism (ESM), and the Fondo Latinoamericano de Reservas (FLAR), will be held on May 17 and 18, 2018 in Cartagena de Indias, Colombia. The seminar is an annual event aiming at bringing academics and institutions together to discuss key issues pertaining to global and regional financial stability.

FLAR Executive President Mr José Darío Uribe and AMRO Deputy Director Mr Yasuto Watanabe will deliver the opening remarks. The event will comprise three sessions. The first session, led by ESM Chief Economist Mr Rolf Strauch will focus on the collaboration among the multiple layers of the Global Financial Safety Net. Chaired by AMRO Chief Economist Dr Hoe Ee Khor, the second session will discuss Design of conditionality and country ownership. The last session, led FLAR Director of Economic Studies Mr Carlos Giraldo, will discuss regional economic integration and the role of RFAs.

Among the discussants and speakers will be renowned academics and experts, representatives from international, regional and national organizations, and the private sector.

The event is by invitation only.

17 MAY 2018 (THURSDAY) 

8:30 am – 9:00 am Registration and welcome coffee
9:00 am – 9:20am Opening Remarks

·         José Darío Uribe, Executive President, FLAR.

·         Yasuto Watanabe, Deputy Director, AMRO

9:20 am – 12:20 pm Session 1: Stitching together the multiple layers of the Global Financial Safety Net: where does the complementarity reside?

The Global Financial Safety Net (GFSN) has been often blamed to be fragmented or “patchy”.  The term was coined to encompass different resources available to fight against liquidity crunch at the height of the Global Financial Crisis and during the subsequent economic recessions. A relevant question is to which extent different layers – that is reserves, bilateral swap lines, as well as RFA and IMF resources – have been substitutable or complementary and whether the GFSN can be made more effective. If they are substitutable, countries could switch from a more expensive form of insurance to a less costly one. If they are complementary, countries could have found ways to combine the use of different tools in order to generate synergies in terms of timing of intervention, sequencing, size and conditionality design. Academics are encouraged in this session to share their understanding of the relationship between different layers of resources available for crisis-time liquidity provision and options to improve effectiveness.

Chair: Rolf Strauch, ESM (5 minutes)

Presenters:

Hiro Ito, Portland State University (30 minutes)

William W. Grimes, Boston University (30 minutes)

Coffee break (15 minutes)

Discussants:

David Marston, G20 Eminent Persons Group Secretariat (10 minutes)

Ousmène Mandeng, London School of Economics (10 minutes)

Gao Haihong, China Academy of Social Science (10 minutes)

Gong Cheng, European Stability Mechanism (10 minutes)

Thomas Marx, G20 IFA Working Group (10 minutes)

Q&A (50 minutes)

12:20 pm – 01:30 pm Photo Session and Lunch
01:30 pm – 4:30pm Session 2: Design of conditionality and country ownership

One complex issue with providing a macroeconomic and financial assistance program is related to the design of conditionality. Based on the IMF’s long-standing experience, conditionality has been a useful tool to induce necessary policy reforms and contain moral hazard risks. However, smooth design and implementation of conditionality depend very much on the specificities of the beneficiary countries. At the same time, how to ensure country ownership in this process is one of the key factors to translate the conditionality into domestic policy and legal framework, and helps increase the value of the safeguards on the resources provided in the conditionality. This session will allow an exchange of the knowledge between academics, the IMF and RFAs, and provide an opportunity to take stock of past experiences in designing and implementing conditionality from various institutions. With the consideration of the country ownership, the discussion could also touch upon how conditionality accommodate the social development of beneficiary countries, including well-being of people, job creation, inequality, poverty reduction and so on. In addition, the dynamic interaction between economic design of conditionality, legal constraints and political reality could be further explored.

Chair: Hoe Ee Khor, AMRO (5 minutes)

Presenters:

Graham Bird, Claremont Graduate University and University of Surrey (30 minutes)

Alexander Kentikelenis, Trinity College, Oxford University (30 minutes)

Coffee break (15 minutes)

Discussants:

Muhamad Chatib Basri, former Minister of Finance, Indonesia (10 minutes)

Roberto Junguito, former Minister of Finance, Colombia (10 minutes)

Bodo Ellmers, EURODAD (10 minutes)

Petya Koeva Brooks, IMF (10 minutes)

Nicola Giammarioli, European Stability Mechanism (10 minutes)

Q&A (50 minutes)

                    7:00 pm Dinner for all participants

18 MAY 2018 (FRIDAY) 

9:00 am – 12:00pm Session 3: Promote regional economic integration: the role of RFAs and beyond

With the rising populist thinking and protectionist risks in many countries, there seems to be a headwind against globalization. In this context, the question arises whether we are moving towards a more “regionalized”, multipolar pattern of trade and financial flows. What challenges will RFAs face in this context and what role can they play? Can they help to unlock regional synergies for growth and employment creation? This session aims to encourage debates on how to enhance trade and financial integration in different regions in this time of uncertainty and what role RFAs can play in this regard.

Chair: Carlos Giraldo, FLAR (5 minutes)

Presenters:

José Antonio Ocampo, Central Bank of Colombia and Columbia University (30 minutes)

Masahiro Kawai, University of Tokyo (30 minutes)

Coffee break (15 minutes)

Discussants:

Yisr Barnieh, Arab Monetary Fund (10 minutes)

Alisher Mirzoev, Eurasian Fund for Stabilization and Development (10 minutes)

Marie Houdart, European Commission (10 minutes)

Cyn-Young Park, Asian Development Bank (10 minutes)

Daniel Titelman Economic Commission for Latin America and the Caribbean (ECLAC) (10 minutes)

Q&A (50 minutes)

12:00 pm – 12:10 pm Closing Remarks

Rolf Strauch, Chief Economist and Member of the Management Board, ESM

12:10 pm – 1:30 pm Lunch

Opening Remarks by Mr Yasuto Watanabe, Deputy Director of AMRO
at the 2nd Joint Regional Financing Arrangement (RFA) Research Seminar
 Cartagena de Indias, Colombia
17-18 May 2018

(As prepared for delivery)

– Invitado distinguidos,
– Representantes de los acuerdos de financiación regional,
-Damas y caballeros,
¡Buenos días!

1. En primer lugar, me gustaría dar las gracias al señor José Darío Uribe, presidente ejecutivo, y a los colegas de FLAR por su hospitalidad y excelentes arreglos para el segundo seminario de investigación de los Acuerdos Financieros Regionales, un foro anual organizado conjuntamente por AMRO, ESM y FLAR. Cartagena es una ciudad llena de hermosos paisajes y rica cultura e historia, así como de actividades económicas muy dinámicas, especialmente en la industria marítima y el turismo.

[Distinguished speakers, Representatives from Regional Financing Arrangements, Ladies and gentlemen, Good morning!

1. First of all, I would like to thank Mr José Darío Uribe, Executive President, and colleagues from FLAR for your hospitality and excellent arrangements for the second RFA Research Seminar, an annual forum jointly organized by AMRO, ESM and FLAR. Cartagena is a city full of beautiful landscapes and rich culture and history as well as very dynamic in economic activities, especially in the maritime industry and tourism.]

2. Last year, AMRO had the great pleasure to host the inaugural Joint RFA Research Seminar in Singapore, which was well attended by participants from different parts of the world. We believe that this annual engagement shows the strong commitment of RFAs to collaborate and enhance the effectiveness of the Global Financial Safety Net or the GFSN. The seminar today provides an invaluable window to facilitate knowledge sharing among participated institutions, and allow us to learn from past experiences and to acquire lessons that may be useful for financial institutions, particularly RFAs, to better support countries.

3. RFAs are considered to be a key component of the GFSN whose other components are foreign reserves, bilateral swap lines (BSAs) between central banks, and the International Monetary Fund (IMF). In an increasingly integrated world, global and regional financial arrangements have been enhanced and should cooperate better with one another to form a comprehensive and effective safety net against financial crises and contagion.

4. At the global level, the IMF has been reviewing its facilities periodically to ensure that they are adequate to meet the financing needs of the members in light of developments in the global economy and financial markets. For RFAs, there have been continuous efforts by the RFAs to strengthen our own mechanism as well as the collaboration among RFAs and between RFAs and other layers of the GFSN. There is continuous challenge to further enhance our capacity and coordination in anticipation of any possible crisis in the future. The strong upswing of the global economy also provides an opportune time for RFAs to perform a more comprehensive review and reform.

5. In particular, there are several aspects that need to be enhanced in order to boost RFAs’ contribution in the GFSN:

• First, coordination among multiple layers of the GFSN. This is the prerequisites to provide timely and efficient support for countries that are in need of financing to support its external position. Countries should be able to combine the use of different tools in order to generate synergies in terms of timing of intervention, sequencing, size and conditionality design.

• Second, designing and applying a macroeconomic policy and measures to achieve a country’s macroeconomic and financial stability. Smooth design and implementation of policy and measures depend very much on the specificities of the beneficiary countries, and country ownership is crucial to ensure the relevancy and adoptability of the conditionality in the domestic policy and legal context.

• Third, regional economic integration and the role of RFAs. With the rising protectionist risks in major economies, especially from the U.S. administration, as well as changes in production networks, there is a need to strengthen intra-regional connectivity and integration to meet growing intra-regional demand and improve the resilience of the region against external shock. Earlier this month, AMRO released our flagship report, the ASEAN+3 Regional Economic Outlook (AREO) 2018, with the theme “Resilience and Growth in a Changing World”. The report suggests policy recommendations for the region to respond to those challenges, which might be relevant to other regions as well. I would highly encourage you to read the report to get more ideas on this topic.

6. In today’s highly interconnected global economy and financial markets, financial crises are bound to recur every now and then, although it is hard to predict when and where. Thus, strengthening RFAs and enhancing the coordination among different layers of the GFSN are crucial to securing global and regional financial stability.

7. We have an impressive list of speakers and panelists today who will bring prominent and diverse views and perspectives to the table. I believe that we will have a very informative and enriching discussion. [With this, now I would like to give the floor to Mr Rolf Strauch, ESM Chief Economist, to lead the first discussion session.]

Thank you very much.

Working Together across Regions to Strengthen Macroeconomic Stability and Prosperity

Cartagena de Indias, Colombia, May 18, 2018 – Regional Financing Arrangements (RFAs) need to work closely together to fully deploy their individual capabilities and strengthen synergies. Such close cooperation between RFAs and the other layers of the Global Financial Safety Net (GFSN) is crucial to strengthening global financial and economic stability. These were the main conclusions of participants at the 2nd Joint Regional Financing Arrangements Research Seminar, held today in Cartagena de Indias, Colombia.

Speakers and participants at the 2nd RFA Research Seminar in Colombia.

The RFAs Research Seminar is an annual event that brings together scholars and institutions to discuss global and regional financial stability. It is jointly organized by ASEAN+3 Macroeconomic Research Office (AMRO), the European Stability Mechanism (ESM), and the Latin American Reserve Fund (FLAR). “I welcome this cooperative event, which brings RFAs of the world, the International Monetary Fund (IMF), and academics together. Sharing know-how and aligning practices is crucial for the increasingly important work these institutions do to fight crises”, said Rolf Strauch, Chief Economist at the ESM.

During the 2nd Joint RFA Research Seminar, topics discussed included strengthening collaboration among the multiple layers of the GFSN, designing conditionality and country ownership, and promoting regional economic integration and the role of RFAs.

One point of discussion was how to combine different GFSN tools to generate synergies during financial and economic shocks. These different layers can better align practices and complement each other. “Complementing the different layers of the GFSN is a key factor to strengthen its capacity to prevent and solve economic and financial crises. Ongoing collaboration among RFAs and between RFAs and the IMF is a key element for regional and global economic stability”, said José Darío Uribe, FLAR Executive President.

Based on the experiences of countries in Asia, Europe and Latin America, participants discussed issues such as the type of assistance packages and the design of programme conditions. Experience shows that designing and applying a conditionality framework to achieve a country’s macroeconomic and financial stability is a complex matter. On the one hand, it contributes towards ensuring that the country receiving the financing implements the necessary policy reforms to achieve macroeconomic stability, reduce moral hazard, and strengthen the repayment capacity. On the other hand, conditionality should be designed in a way to ensure national ownership and that its implementation will not cause unnecessary social costs.

Mr Yasuto Watanabe, Deputy Director of AMRO speaks at the seminar.

“Smooth design and implementation of conditionality depend very much on the specificities of the beneficiary countries, and country ownership is crucial to ensure the relevancy and adaptability of the conditionality in the domestic policy and legal context”, said Yasuto Watanabe, Deputy Director of AMRO. “The seminar is very useful in facilitating knowledge exchange and allowing us to acquire lessons learned from past experiences that are relevant to financial institutions, particularly RFAs”.

A final topic for discussion was the role of RFAs in promoting regional economic integration. In this regard, RFAs have a key role to play. The more localised knowledge of the countries’ economic situation, as well as closer their ties with the countries they operate in, provide a privileged position for RFAs to promote financial stability and integration among the regions’ countries.

AMRO Chief Economist Dr Hoe Ee Khor moderates one session of the seminar.

As Dr. Uribe said, “the regional economic integration processes should have mechanisms that may contribute to guarantee the macroeconomic stability of the member countries, a matter where RFAs have a fundamental mission as part of the GFSN, in coordination with global and national bodies and institutions”.

The 3rd RFA High-Level Dialogue will take place in October in Bali, Indonesia, and it will focus on cooperation, including mechanisms and complementarity between RFAs and the IMF.

Speakers and participants at the 2nd RFA Research Seminar in Colombia.

Mr Yasuto Watanabe, Deputy Director of AMRO speaks at the seminar.

AMRO Chief Economist Dr Hoe Ee Khor moderates one session of the seminar.