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Thursday
25
October

Financial Development, Stability and Growth

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Organised by Centre for Trade and Economic Integration (CTEI) at the Graduate Institute of International and Development Studies, Geneva on behalf of the State Secretariat of Economic Affairs (SECO).

In collaboration with the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), and the World Bank Group.

This Conference on Financial Development, Stability and Growth will assess the opportunities and challenges of financial market development and integration in emerging and developing economies.

While deeper integration offers the gains of higher growth and increased financing opportunities it is associated with a higher vulnerability to external developments. Therefore, determining the optimal level of financial integration is complex. The sharp disruptions in domestic and international financial markets during crises further highlight the challenges faced by policy makers. The aim of the Conference is to take stock of recent developments and draw key lessons, encompassing both international financial integration and the development of domestic financial markets and linking the two facets.

Academics and policy makers have long recognized that international financial integration is a challenging exercise. Higher access to world market allows a country to rely on broad sources of financing and offers its residents a more diversified set of opportunities. However, it also exposes the country to the vagaries of international markets. If the ability of the domestic financial sector to steer capital flows efficiently is limited, the ultimate result may be a severe crisis. An underdeveloped domestic market can also have international consequences, for instance through sustained outflows of domestic savings into foreign markets that offer better opportunities, possibly generating imbalances.

The Conference will first discuss the opportunities and challenges of financial integration, with an emphasis on the lessons learned from the recent crisis.A particularly challenging characteristic of international capital flows is their volatility, made obvious when capital flows suddenly stopped in late 2008, followed by a massive increase. This has prompted an international debate on how to address these risks. The second panel will focus on how to manage volatile flows, analyzing how deepening of the domestic financial sector can facilitate this delicate policy exercise.

Beyond the issue of stability, financial sector development plays a substantial role in economic growth, provided that funds can be steered towards productive activities. This will be the focus of the third panel, with a discussion of the policy options available to promote growth-enhancing forms of capital flows and an efficient intermediation by the domestic financial sector.

Promoting growth involves the need to broaden the range of and to improve access to financial services for the population at large. However, recent developments in microfinance have shown that when supervision is flawed, financial development can become counterproductive. The fourth panel will consider how to foster financial sector development in view of reducing poverty and social tensions, highlighting the regulatory and supervisory challenges and the importance of consumer protection and financial literacy.

The final panel will draw the main conclusions from the Conference and discuss their implementation, linking them with the ongoing efforts in the G20.

Consult the conference programme here
 


Auditorium Jacques-Freymond, Site Barton, 132 rue de Lausanne
Registration required. Please register here
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