Gearhead » May 21st, 2014, Bretton Woods Committee Annual Meeting:
EMERGING MARKETS - ECONOMIC EVENTS
WEDNESDAY, MAY 21
WASHINGTON - 2014 Bretton Woods Committee Annual Meeting. Speakers:- IMF Managing Director Christine Lagarde, World Bank President Jim Yong Kim and Inter-American Development Bank President Luis Alberto Moreno. MANILA - 23rd World Economic Forum on East Asia will be held in Manila (to May 23).
THURSDAY, MAY 22
LONDON - Central Bank of Hungary Gyorgy Matolcsy speaks at the OMFIF Golden Series lecture on "The way out of the European economic crisis - the Hungarian perspective" - 0930 GMT. ANKARA - Central Bank of Turkey holds Monetary Policy Committee Meeting. PRETORIA - The South African Reserve Bank announces its decision on interest rates.
SATURDAY, MAY 24
SHANGHAI, China - ECB Executive Board member Yves Mersch speaks at a high-level roundtable "Asia's Growth Bottleneck: Who Can Find A Breakthrough?" at the Shanghai Forum 2014 "Asia Transforms: Identifying New Dynamics" organized by Fudan Development Institute in Shanghai - 0530 GMT.
SUNDAY, MAY 25
SINTRA, Portugal - ECB Forum on Central Banking in Portugal (to May 27). Speakers:- ECB President Mario Draghi, IMF Managing Director Christine Lagarde, ECB Vice President Vitor Constancio, Central Bank of Turkey Governor Erdem Basci, ECB executive board member Benoit Coeure and Bank of Mexico Governor Agustin Carstens.
MONDAY, MAY 26
JERUSALEM - Bank of Israel Announces Interest Rate Decision - 1300 GMT.
TUESDAY, MAY 27
LONDON - Conference on Inclusive Capitalism: Building Value, Renewing Trust. Speakers:- IMF Managing Director Christine Lagarde, Bank of England Governor Mark Carney, Former U.S. President Bill Clinton and London City Mayor Alderman Fiona Woolf. BRASILIA - Brazil Central Bank holds Monetary Policy Committee Meeting (to May 28).
THURSDAY, MAY 29
MAPUTO - Africa Rising Conference in Mozambique (to May 30). Speakers:- Mozambique Finance Minister Manuel Chang, Mozambique President Armando Guebuza, IMF Managing Director Christine Lagarde, Bank of Botswana Governor Linah Mohohlo, Uganda Finance Minister Maria Kiwanuka, Cameroon Finance Minister Alamine Ousmane Mey, Bank of Tanzania Governor Benno Ndulu, Bank of Mozambique Governor Ernesto Gove, Mali Finance Minister Bouare Fily Sissoko, Ghana Finance Minister Seth Terkper, Burkina Faso Finance Minister Lucien Marie Noel Bembamba and IMF Chief Economist Olivier Blanchard. CAIRO - Central Bank of Egypt holds Monetary Policy Committee Meeting.
FRIDAY, MAY 30
TOKYO - IMF Seminar: Toward a more dynamic business sector. Speakers:- IMF Director of Asia and Pacific Department Changyong Rhee, Japan's Vice Minister of Finance for International Affairs Mitsuhiro Furusawa, IMF Deputy Division Chief of Fiscal Affairs Department Ruud De Mooij and IMF Division Chief of Asia and the Pacific Department Stephan Danninger.
MONDAY, JUNE 2
ISTANBUL, Turkey - The Istanbul School of Central Banking organizes Macro Workshop 2014 in Istanbul (to Jun 3). Federal Reserve Bank of Chicago President Charles Evans gives lecture on current economic conditions and monetary policy at the workshop - 0700 GMT.
Gearhead » May 21st, 2014, 1
A little history & definitions... Good read
70 YEARS OF THE BRETTON WOODS: REGAINING CONTROL OF THE INTERNATIONAL MONETARY SYSTEM
Project of the Reinventing Bretton Woods Committee and Eurasian Economic Club of Scientists Association
Is the notion of Reinventing Bretton Woods conceivable? This simple question brought a multitude of thoughts about the bold objectives of the 45 nations whose representatives gathered at Bretton Woods, New Hampshire in the summer of 1944 to establish a new economic order; about the extent to which these ambitions have been fulfilled; about the many new challenges that have arisen in the world economy since Bretton Woods; and where, in view of these challenges, the international financial system is leading us.
It is certainly true that the international monetary system has changed considerably since Bretton Woods--and in ways that were largely unforeseen in 1944. Instead of a system of fixed exchange rates among major currencies, we now have a mixed system with major currency areas floating but fixed rates among many smaller countries.
Where capital controls were once pervasive, we now have global financial markets. From the relatively small group of 35 countries that became the founding members of the International Monetary Fund. Fund membership has expanded to include virtually every economy in the world.
Indeed, with all the complexities and uncertainties that the existing international monetary system presents, “Bretton Woods” seems to evoke a more orderly and cohesive world, raising the question of whether the international community should not strive toward a “new” Bretton Woods.
In order to answer this question, however, one must first consider more fully what “Bretton Woods” and the IMF, the institution established to oversee the new monetary order, were intended to achieve.
“Bretton Woods” has become almost synonymous with the fixed exchange rate system that prevailed from the time of the IMF's establishment until the abandonment of fixed rates in 1973. However, the visionaries at the Bretton Woods conference had broader objectives in mind.
As stated in the IMF's Articles of Agreement, they were striving toward a system that would “promote international monetary cooperation”, “facilitate the expansion and balanced growth of international trade,” and “contribute thereby to the promotion and maintenance of high levels of employment and real income....”
They also aimed to “promote exchange stability...maintain orderly exchange arrangements among members and... avoid competitive exchange depreciation.” At the same time, they wanted to “assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade.”
As these goals suggest, the purpose of “Bretton Woods” was above all to establish a more stable and prosperous world economy, and the role of the IMF would be to help promote the preconditions for this.
1994, the 50th Anniversary of the Bretton Woods Conference, provided the opportunity for a thorough review of the functioning of the international monetary system. This took place in an atmosphere of satisfaction and complacency with the general operation of the system.
Long gone were the complaints which characterised the 1970’s about the monetary anarchy created by the collapse of the par-value regime for exchange rates and the calls for the IMF to regulate world liquidity through its multilateral new currency the SDR. Indeed, following the wave of deregulation and liberalisation, the concept of an international monetary system seemed increasingly inappropriate or even obsolete: if every country kept its house in order, floating exchange rates and free capital movement would cushion national economies while facilitating adjustment of international payment imbalances.
Hence there would be no need for institutions to manage “systemic” issues. Very few voices were to be heard complaining about the current non-system and calling for a new Bretton Woods conference to reinvent the monetary system for the new millennium.
By 2004, the 60th anniversary of the institutions, however, the landscape had changed dramatically. The wave of financial crises in emerging markets in the previous decade— Mexico in 1994/95, East Asia in 1997, Russia Brazil 1998, Argentina 2001 – had generated growing discontent with the system.
This debate, which took place under the label of reform of the international financial architecture, passed through various phases. Initial radical thoughts for setting up a global central bank or a world financial authority, were rejected as impractical. Subsequent thinking coalesced around more pragmatic measures designed to help prevent financial crises and to manage those that occurred better.
An important part of the reform was the establishment of comprehensive standards, representing best global practices toward which all countries participating in the global system would strive. At that time, some observers argued that we had re-entered “the old paradigm ”.
Professor Michael Dooley and his colleagues argued that the previous system was never actually destroyed, just put into hibernation. Just as Europe and Japan benefited from fixed exchange rates in the 1950s and '60s, the reasoning went, so Asia was now profiting from the same.
The success of China and India in exporting goods and services respectively was certainly built in part on undervalued currencies. Some Asian currencies kept fixed rates, some had a managed float, but all of them continued to accumulate vast amounts of official reserves in US dollars. The insight of Dooley's team was that this was a contract, like Bretton Woods, not the operation of a free market.
China had the potential to be a source of strength as well as vulnerability in reinforcing the precarious stability that had returned to the international financial system, and in underpinning the recently interrupted move toward a genuinely global system of open finance.
In 2014, as we approach the 70th anniversary of the Bretton Woods conference, pessimism has returned.
The global financial system continues to stumble from crisis to crisis. From the great recession of 2009, to the longest financial crisis in history, to the travails of the Eurozone, there is no end in sight.
There is a growing feeling that the major challenge for the new generation of policy makers will be to regain control of the international monetary system. Today the philosophy of the global financial system seems to rely on each country managing its own economy in what it perceives to be its own best interest without giving much attention to global consistency.
This is the age of fragmentation and divergence. Supporters of ‘muddling through’ hope that this will lead to a satisfactory outcome for the world, just as, given certain conditions, the actions of individuals who follow their own self-interest leads to a socially efficient outcome.
And so far the world has indeed muddled through in this way, without a disaster comparable to the global depression of the 1930s.Yet many observers feel that it would be wrong to accept this for two reasons: first, the output losses from the great financial crisis have been appallingly high; secondly, there is no guarantee that the next crisis may not be even more severe.
The features of the international monetary system today reveals high exchange rate volatility, persistent large external imbalances, competitive devaluations, significant international reserve accumulation, fragmentation of financial markets, financial repression and growing difficulties in maintaining a satisfactory international level of cooperation.
In this light, multilateral initiatives such as the BRICS’ announcement of a new development bank and more recently, a joint currency reserve pool to protect against “unintended negative spillovers”, may be seen as pragmatic steps towards providing alternative, multilateral solutions.
The continued dominance of the US dollar as both a reserve and trading currency, not least in the current fiscal context in AME, potentially poses a significant risk to global financial and economic stability going forward, particularly but not exclusively in the event of a significant re-pricing of US sovereign credit risk.
The development and growth of local currency bond markets in EMEs, along with increasing liquidity and currency convertibility provide a growing new source of diversification of reserves for central banks and sovereign wealth funds.
Against this background, the project’s concept can be simply summarized. Looking ahead to the 70th anniversary, public officials, private sector practitioners, and academics from around the world will convene in a number of meetings to develop a new normative and practical agenda.
During the course of the year, a series of discussions, supported by commissioned research, will aim to improve the clarity of thinking and broaden the area of common ground on steps needed to adapt the international financial architecture to current challenges.
The process – in effect, a rolling public-private international workshop – will culminate in a final report prepared by the Secretariat of RBWC summarizing the proceedings and providing an analysis with recommendations, including suggestions aimed at reviving global cooperation in an age of market fragmentation and policy divergence. The final report will be supplemented by publication of the commissioned working papers.
Activities in 2014
In 2014, a number of small, focused conferences and supporting research papers are being planned with the support of the following organizations:
·International Capital Movement, Exchange Rate Volatility and Prospects of International monetary Reform February 16 17 2014 in cooperation with the Central Bank of Indonesia
·Regaining Control of the International monetary system : Vienna Feb 27 28 2014 in cooperation with the central Bank of Austria
·The New Economic Landscape Australia with the G20 chair Feb 20 21 2014
·China in the international Monetary System Prospects of A Multiple Reserves Currencies ?
·The IMF in a multipolar world Washington DC April 19 2014
·Bretton Woods at70: An Anticrisis Plan for the 21 st century May 21 22 2014
·Bretton woods at 70 : Arequippa in cooperation with the central bank of Peru
Organization and Administration
The Convention project is established at the initiative of the Reinventing Bretton Woods Committee, a non-profit organization dedicated to study the changes in the international financial institutions through a regular dialog with the private sector and the academic community, and the the Eurasia Club of scientists will be guided by a Steering Committee of senior experts from the public and private sectors and academia. The work of Bretton Woods at 70 will be supported by a staff based in the United States and Europe, Central Asia .
Reinventing Bretton Woods Committee. The Reinventing Bretton Woods Committee was founded in 1994 to study the changes needed in economic institutions if they are to be effective in this new environment.