A wide range of issues important to the international economy and to individual countries were discussed during the joint seminar program held in conjunction with the Annual Meetings. Cosponsored by the IMF and the World Bank, the seminars provided a forum for important figures from the private sector to discuss these issues with senior government officials and representatives of the international financial institutions.
The program opened on September 25 with a seminar on the prospects for international capital flows in the aftermath of the Asian crisis. The first speaker, Andrew Crockett, General Manager of the Bank for International Settlements, emphasized that free and open markets were essential to the reform of the international monetary and financial system. Large capital flows had produced widespread instabilities, and it was now essential to strengthen banking systems and supervision. It was equally important to improve the composition of flows, he said. Direct investment should take over the burden of long-term investment, with banking flows being restricted to providing backup financing.
IMF First Deputy Managing Director Stanley Fischer said the participation of the private sector in providing crisis lending could take two forms: ex ante, the private sector could provide private contingent credit lines, while ex post, the private sector had to be involved when the financing needs were so great that the official sector proved inadequate. He discussed the situation of Ecuador, which needed to implement a serious adjustment program and act to solve its financing problems through discussions with its creditors and through adopting sound domestic policies.
Arminio Fraga Neto, the Governor of the Central Bank of Brazil, traced the successful policies his country had followed since the crisis. He said that crisis in financial markets was a fact of life, with the common fault lying in short-term capital flows. It was crucial for countries to have clearly sustainable fiscal policies, he said, adding that managed exchange rates were an invitation for complacency and myopia.
In a seminar on exchange rate systems for emerging markets, Michael Mussa, Economic Counsellor and Director of the IMF's Research Department...