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The Limits of Surveillance and Financial Market Failure
Lessons from the Euro-Area Crisis
Date: Monday 23rd September 2013
Place: La Maison de l’Europe de Paris, 35 rue des Francs Bourgeois, Paris 4e
What this conference is about？
The euro-area crisis, which erupted only a few years after the outbreak of the global financial and economic crisis originating from the US housing market debacle, has revealed weaknesses in the regional as well as global frameworks for financial and economic crisis prevention.
In fact, neither regional surveillance within the European framework nor global surveillance by international institutions such as the IMF and the OECD were effective in preventing such large-scale crises in developed countries. Can more effective surveillance be put in place to prevent their recurrence?
In addition to limits to effective surveillance, the repeated financial crises have shed light on deficiencies in the current prudential and monetary policy frameworks. How should they be changed to secure financial market stability and minimize economy-wide disturbances arising from financial market imbalances while maintaining general price stability at the same time?
After discussion of these issues, not only in the context of the euro area but with a broader global perspective, the seminar will focus on specific policy issues: how (i) to contain, and prevent the future re-emergence of, excessive intra-regional imbalances; and (ii) to achieve greater convergence in the euro area, an indispensable condition of the better management of the euro area. This part of discussion will cover a broader set of political economy and governance issues including coordination of fiscal and structural policies in the euro-area with a single monetary policy.
This international conference will gather first-class economists with rich experience in domestic and international economic and financial policy-making as well as policy advisory work in Europe, the United States and Japan and aims at in-depth discussion of these fundamental issues of our time with a view to finding ways for better management of the euro-area and the global economy more generally.
It has been initiated as a non-bipartisan, non-political voluntary activity by Kumiharu Shigehara, President of the International Economic Policy Studies Association and former Deputy Secretary-General and chief economist of the Organisation for Economic Co-operation and Development (OECD).
Provisional Agenda
Session 1 (9.30~10.15):
The Limits of Global and Regional Surveillance: the case of the euro area
Why has global surveillance by international institutions such as the IMF and the OECD as well as regional surveillance within the European framework not been effective in preventing and containing the euro area crisis? How should more effective surveillance be achieved?
Chairperson: Kumiharu Shigehara
Initial Speakers: André Icard, Leif Pagrotsky, Val Koromzay
(Open discussion)
Session 2 (10.15~11.00):
Strengthening the Micro-prudential Policy Framework
How should micro-prudential control be strengthened to prevent local and global financial market failure? Discussion in this and the next sessions will take place not only in the context of the euro area but with a broader global perspective.
Chairperson: André Icard
Initial Speakers: Paul Atkinson, Jeffrey Shafer, Carol Sirou
(Open discussion)
Session 3 (11.00~11.45):
Coordinating Macro-prudential and Monetary Policy Management
How can macro-prudential and monetary policies be used to secure financial market stability and minimize economy-wide disturbances arising from financial market imbalances while securing general price stability at the same time?
Chairperson: Philip Turner
Initial Speakers: Stephen Axilrod, Adrian Blundell-Wignall,
Charles Goodhart
(Open discussion)
Session 4 (11.45~12.45): More Effective Management of the Euro Area
How should the euro area be managed to contain, and prevent the future re-emergence of, excessive intra-regional imbalances and to achieve greater convergence? Discussion in this concluding session will cover a broader set of political economy and governance issues including coordination of fiscal and structural policies in the euro-area with a single monetary policy.
Chairperson: Robert Raymond
Initial Speakers: Niels Thygesen, Gunter Baer, Carles Gasòliba
(Open discussion)
Additional Information
1. Contact points for enquiry about the seminar: Ursula Serafin, Directrice du dévelopment et de l’administration de La Maison de l’Europe de Paris (Tel/Fax: 01.44.61.85.90; Email: u.serafin@paris-europe.eu) and Renaud Léon (Email: europe1@paris-europe.eu).
2. Oral presentations and discussions at the seminar will be conducted in either English or French without simultaneous translation.
3. Participants in the seminar may wish to read the following notes prepared by several of pre-assigned speakers in advance of the seminar. Access to the notes can be made at: www.paris-europe.eu.
The Main Issues Note (with Annexes 1 and 2):
Kumiharu Shigehara
Commentary Notes (in the order of presentation at the conference):
André Icard
Leif Pagrotsky
Paul Atkinson
Stephen Axilrod
Adrian Blundell-Wignall
Charles Goodhart
Niels Thygesen
4. Profiles of authors of the notes listed above, chairpersons and pre-assigned speakers (in the alphabetical order):
Paul Atkinson:
Executive Director and Senior Fellow of the International Economic Policy Studies Association. Former Deputy Director of the Directorate for Science, Technology and Industry at the Organisation for Economic Co-operation and Development. Former editor of OECD Economic Outlook.
Stephen Axilrod:
Consultant. Former staff director for monetary and financial policy at the US Federal Reserve Board and also staff director and secretary of the Federal Open Market Committee. Author of "Inside the Fed: Monetary Policy and Its Management: Martin through Greenspan to Bernanke, Revised Edition" (MIT Press 2011) and "The Federal Reserve: What Everyone Needs to Know" (Oxford University Press 2013).
Gunter Baer:
Former Secretary General of the Bank for International Settlements. Former Secretary General of the Committee of EEC Governors. Rapporteur, together with the late Tommaso Padoa-Schioppa, of the Delors Committee.
Adrian Blundell-Wignall:
Special Advisor to the Secretary-General on Financial Markets and Deputy Director of the Directorate for Financial and Enterprise Affairs at the Organisation for Economic Co-operation and Development.
Carles Gasòliba:
President of Barcelona Centre for International Affairs (CIDOB). Chairman of the Spanish Committee of the European League for Economic Cooperation (LECE) and of its Mediterranean Committee in Brussels. A former chairman of the Senate Committee for the Economy and Treasury. Former member of the European Parliament in the Economics and Monetary Committee.
Charles Goodhart:
Professor Emeritus and member of the Financial Market Group at the London School of Economics. Former member of the Bank of England’s Monetary Policy Committee. Developer of Goodhart law, an economic law named after him.
André Icard:
Former Deputy General Manager of the Bank for International Settlements. Former Directeur General des Etudes at the Banque de France. Co-editor, together with Jack Boormann, of the final report on the reform of the international monetary system prepared by the Palais Royal group initiated by Michel Camdessus, Alexandre Lamfalussy and the late Tommaso Padoa-Schioppa.
Val Koromzay:
Former Director of the Country Studies Branch of the Economic Department of the Organisation for Economic Co-operation and Development.
Leif Pagrotsky:
Former member of the cabinet of the Swedish government, former Minister of Industry and Trade, and former Minister of Education, Research and Culture. Former Vice Chairman of the General Council of the Riksbank.
Robert Raymond:
Former Director General of the European Monetary Institute. Honorary Director General at the Banque de France. Former Chairman of CPR Bank. Advisor to the International Economic Policy Studies Association.
Jeffrey Shafer:
Consultant. Former Vice Chairman of Citigroup Global Markets. Former Undersecretary of the U.S. Treasury for International Affairs. Former staff official of the OECD and the Federal Reserve (Board of Governors and NewYork Bank).
Kumiharu Shigehara:
President of the International Economic Policy Studies Association. Former Deputy Secretary-General and chief economist of the Organisation for Economic Co-operation and Development. Former chief economist of the Bank of Japan.
Carol Sirou:
President of Standard & Poor’s Credit Market Services France
Niels Thygesen:
Professor Emeritus of the University of Copenhagen. Former chairman of the OECD Economic and Development Review Committee. Member of the Delors Committee. Advisor to the International Economic Policy Studies Association.
Philip Turner:
Deputy Head of Monetary and Economic Department of the Bank for International Settlements.
Provisional Agenda
Session 1 (9.30~10.15):
The Limits of Global and Regional Surveillance: the case of the euro area
Why has global surveillance by international institutions such as the IMF and the OECD as well as regional surveillance within the European framework not been effective in preventing and containing the euro area crisis? How should more effective surveillance be achieved?
Chairperson: Kumiharu Shigehara
Initial Speakers: André Icard, Leif Pagrotsky
(Open discussion)
Session 2 (10.15~11.00):
Strengthening the Micro-prudential Policy Framework
How should micro-prudential control be strengthened to prevent local and global financial market failure? Discussion in this and the next sessions will take place not only in the context of the euro area but with a broader global perspective.
Chairperson: André Icard
Initial Speakers: Paul Atkinson, Jeffrey Shafer, (a French discussant)
(Open discussion)
Session 3 (11.00~11.45):
Coordinating Macro-prudential and Monetary Policy Management
How can macro-prudential and monetary policies be used to secure financial market stability and minimize economy-wide disturbances arising from financial market imbalances while securing general price stability at the same time?
Chairperson: Philip Turner
Initial Speakers: Stephen Axilrod, Adrian Blundell-Wignall, Charles Goodhart
(Open discussion)
Session 4 (11.45~12.45): More Effective Management of the Euro Area
How should the euro area be managed to contain, and prevent the future re-emergence of, excessive intra-regional imbalances and to achieve greater convergence? Discussion in this concluding session will cover a broader set of political economy and governance issues including coordination of fiscal and structural policies in the euro-area with a single monetary policy.
Chairperson: Robert Raymond
Initial Speakers: Niels Thygesen, Gunter Baer, Carles Gasòliba
(Open discussion)