Monetary and Regulatory Spillovers Debated at GEG High-Level Roundtable

In the wake of the global financial crisis, advanced economy governments have enacted a series of economic and financial initiatives at the national, regional and international levels. These policies were designed to support advanced economies’ recovery from the downturn and to prevent another crisis. Yet in today’s interdependent global economy, such policies spill across borders, and have had serious effects on emerging and developing countries.

On 12 February, the Global Economic Governance Programme and the Blavatnik School of Government, in association with the programme on the Political Economy of Financial Markets, hosted a high-level roundtable on how monetary and regulatory spillovers are affecting emerging and developing countries, and what can (and should) be done about it. These questions - and the policy decisions they provoke – are urgently important for policymakers in emerging and developing countries. The effects of the US Federal Reserve’s recent tapering policies are being debated passionately in op-ed pages around the world. The workshop brought together participants from all sides of the debate, to identify the key dilemmas posed by spillovers and the tools available in response.  

The day-long conference brought together 30 experts from government, international organisations, academia and the private sector, including officials from the IMF, the European Bank for Reconstruction and Development (EBRD), the African Development Bank, the International Organisation of Securities Commissions (IOSCO), the central bank of Uganda, the central bank of Romania, Citi, Barclays, Chatham House, and Oxford, amongst others. The discussion was organised around three main questions:

• First, what are the policy dilemmas posed for emerging and developing countries by spillovers from advanced economy monetary and regulatory policies? How do these spillovers interact?

• Second, what instruments have emerging and developing countries used to respond to these spillovers? How effective have they been? What lessons have emerged about the viability and costs of different "self insurance" strategies?

• Third, in light of these policy spillovers, how can the international financial architecture best support the growth and stability of emerging and developing countries? Should the architecture be centralized, with global initiatives implemented uniformly across countries; decentralized, with elements of a global framework devolved to regions and countries; or fragmented, where certain countries may coordinate but each region and country attempts to find its own way to optimise?

UPDATE: The full conference report is now available here.