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International Council Meeting Oct 8th Compendium

International Council Meeting Oct 8th Compendium

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A compilation of panel summaries from the Bretton Woods International Council Annual Meeting on October 8, 2010 in Washington DC.
A compilation of panel summaries from the Bretton Woods International Council Annual Meeting on October 8, 2010 in Washington DC.

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Published by: The Bretton Woods Committee on Dec 13, 2010
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12/13/2010

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 Abstract
A Deloitte sponsored Bretton Woods International Committee event on nancial reorm, on October 8, 2010 in Washington,D.C., brought industry leaders together to discuss serious issues. The discussions among these government and industryleaders ocused on complex reorm design and implementation challenges ollowing the recent nancial crisis that underminedsystem and economic stability worldwide. Whether speaking globally or domestically, the issues were essentially the same- progress has been made on reorms, but challenges remain on urther dening reorm regiments and in implementingthe reorms in a consistent manner. Governing bodies have been established to attain and sustain nancial system stability,regulate all systemically important nancial institutions, heighten capital and liquidity standards, and establish cross-borderrecovery and resolution regimes. The consistency o implementation is critically important with the interrelationshipsand international nature o the nancial services industry, as well as the volume and velocity o daily transactions on aworldwide basis. Without consistent implementation, including macro-prudential regulation, supervisory arbitrage couldresult thereby undermining reorms involving systemically important nancial institutions and orderly recovery and resolutionregimes. The condence expressed by the leaders in progress made toward meaningul reorms was encouraging, withthe admonitions or working together within the domestic reorm structures, as well as across international bodiesproviding worthy caution, advice and ideas or how to sustain the system and economic stability universally desired.
Integrating Global Financial andEconomic Reforms
 
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On October 8, 2010 in Washington D.C., the Bretton Woods Committee (BWC) hosted its annual InternationalCommittee meeting, with Deloitte as a strategic sponsor or the event, its content, and tenor. BWC andDeloitte were able to bring leaders rom governments and nancial services organizations rom across theworld to discuss the implications o global nancial and economic reorm or government and industry.Three panels o distinguished speakers presented viewpoints rom around the world on policychoices impacting microeconomic challenges; the status, progress and direction o global nancialregulatory reorm; and the risks and vulnerabilities or sustaining nancial stability.Christine Lagarde, Minister or Economy, Industry and Employment o France, captured the theme o the event in saying:“Our leaders had committed that there would be no market, no product, no player that would not be either regulated orsupervised, and we need to make sure that we continuously deliver on that commitment, given that there is a lot o inventionin the nancial markets. We need to make sure that the regulations and supervisory authorities adapt tothis creativity.”Following are summaries o the discussions. For more detailed inormation,please go to
http://www.deloitte.com/us/globalreforms
.
Introduction
Disclaimer: The views and opinions expressed in this document are not those o Deloitte, but othe conerence participants.As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please seewww.deloitte.com/us/about or a detailed description o the legal structure o Deloitte LLPand its subsidiaries.
 
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•JamesD.Wolfensohn,BrettonWoodsCommittee
 Co-Chair (moderator)
•TharmanShanmugaratnam,MinisterforFinance,Singapore•ChristineLagarde,MinisterforEconomy,Industry
 and Employment o FranceIn this broad policy and economic discussion,panelists addressed a question posed by themoderator on the importance o sustainingthe economic recovery and regulatory reormmomentum through macroeconomic policy.Panel members told the audience that there needs to bemore o a ocus on long-term structural issues than short-term headlines, such as the deleveraging that is currentlytaking place and interacting with economic slowdowns.Without a long-term ocus, countries are likely to veer romone short-term crisis to another. The long-term structuralissues pre-date the recent crisis, but are complicated by theneed to recover rom the economic slowdowns in the crisis.To improve long-term prospects, the panelidentied three points that need to take place:Develop strategies that lay the basis or optimism in
•
the most advanced countries in the world. Demandrom leading economies inspires a whole set osupply chains and what keeps everyone wanting tocatch up with the advanced players. This includesstrategies to grow economies and overcomeunacceptably high levels o unemployment. Tackle the growing problem o social cohesion, with
•
median income or households having stagnatedor nearly two decades. This has resulted in two-tierlabor markets, where a signicant number o people,principally the young, women, and minorities, are leteither without entry into the market or with inerior jobs. It is no longer tenable i you want to recreateoptimism in both the advanced and emerging markets.Respond to the challenge o a new phase o
•
globalization, characterized by the growth o anemerging market middle class seeking education, health,clothing, better ood, and entertainment. In countrieslike China, rising wages are being driven by those movingup the skills ladder and entering the global market inmedium to high skilled jobs beyond the traditionalproduction industries to knowledge-based services.The panel also called or countries to continue to sustaineconomic recovery by coordinating regulatory reormeorts through orums like the G-20 thereby avoidingprotectionism. In that vein, the panelists discussedthree priorities or these orums: actual enorcementand implementation o the agreed upon regulatory andsupervisory environment; sustain the momentum onnon-corporate jurisdictions including the exchange oinormation relative to prudential obligations; and enhanceglobal governance to avoid temptation or protectionism. International monetary system loopholes compel greater
•
organization, coordination, and diversication amongthe G-20 and G-7, including tempering currencies toprotect developing countries and reducing riskwhen currencies are not diversied—rebalancingwhat is obviously out o balance now.Commodities in terms o price-setting, light ocused
•
on visibility and predictability, and market organizationrelative to raw materials, tangibles, and intangibles.This includes stocks, inventories, and reserves orgood supervision o commodity derivative products.
Sustainthemomentumonglobalgovernance•
involving issues like implementing the 2008 Quotareorm and the review o the IMF board composition.This includes combining the appropriate ownershipo the G-20 and representation within it, andworking with the other global organizations such
astheWTO,IMF,FSB,OECD,andothers.
Panel 1Microeconomic Challenges: PolicyChoices and Global Cooperation —Regional Perspectives

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