A well-regulated financial sector is key, but solutions must be tailored to country needs
| Author | Omotunde E.G. Johnson |
| Position | IMF Monetary and Exchange Affairs Department |
| Pages | 200-201 |
Page 200
Financial risks, System Stability, and Economic Globalization was the title of the IMF’s eighth central banking seminar. The seminar, organized by the IMF’s Monetary and Exchange Affairs Department in collaboration with the IMF Institute, was held in Washington on June 5–8. In addition to staff members from the IMF and the World Bank, participants were drawn from private financial firms, academia, regulatory and supervisory agencies, and central banks. Officials from over 35 countries were represented. A volume of the proceedings will be published by the IMF later in the year. IMF First Deputy Managing Director Stanley Fischer and Deputy Managing Director Eduardo Aninat provided opening and closing remarks, respectively.
The topics covered included internal rating processes and models in the measurement and management of credit risks; calculation of counterparty credit exposure when credit quality is correlated with market prices; assessment of a financial system’s ability to withstand financial stress; approaches to regulation and corporate governance in financial firms; welfare costs of systemic risk, financial instability, and financial crises; changes in banking behavior during financial crises; long-run versus short-run effects of too-big-to-fail policymaking; international capital mobility and domestic financial system stability; safety-first monetary and financial policies for emerging countries; fiscal support in financial sector restructuring; international cooperation for financial system stability; and the role of the IMF in assessing financial sector soundness.
Describing the changing role of the IMF in the financial sector, Fischer noted the growing importance of international standards in this area. He touched on other issues that the IMF and its members were addressing as understanding of the central role of the financial sector developed.
The crises that swept through emerging market countries in recent years, Fischer said, left no one in any doubt about the importance of a strong and well-regulated financial sector in dealing with capital flows. But in reexamining the proper role of the IMF in the wake of these crises, it was fair to ask how the institution should incorporate structural and other policies into its normal...
To continue reading
Request your trial