Presentation is loading. Please wait.

Presentation is loading. Please wait.

The consequences of the global economic and financial crisis:

Published byMabel Stevenson Modified over 6 years ago

Similar presentations

Presentation on theme: "The consequences of the global economic and financial crisis:"— Presentation transcript:

1 The consequences of the global economic and financial crisis:
jeudi 20 novembre 2008 jeudi 20 novembre 2008 samedi 27 septembre 2008 samedi 27 septembre 2008 jeudi 20 novembre 2008 Global Forum on Development The consequences of the global economic and financial crisis: How much do we know? Helmut Reisen, Head of Research OECD Development Centre 9 December 2008 1 1 1 1

2 1. Current crisis impact on development finance
jeudi 20 novembre 2008 samedi 27 septembre 2008 samedi 27 septembre 2008 jeudi 20 novembre 2008 jeudi 20 novembre 2008 1. Current crisis impact on development finance RBS estimate: outflows 2008 equal to 1/5 of inflows (1trn.$)‏ Portfolio equity & bond outflows Commercial bank credit Trade credit FDI, M&A Systemic Sudden Stop Calvo, Izquierda, Mejia, NBER Working Paper No 2 2 2 2 2

3 2. Lessons for the diagnosis of policy performance
jeudi 20 novembre 2008 samedi 27 septembre 2008 samedi 27 septembre 2008 jeudi 20 novembre 2008 jeudi 20 novembre 2008 2. Lessons for the diagnosis of policy performance From decoupling to contagion, from hyperbole to endogeneity/cyclicality GDP growth rates “Green” vs ‘black’ accounting Low risk spreads High commodity prices FX reserve levels Not huge forever Currency defense Bank recapitalisation cost Public budgets Deficits → FX rates, Y → debt ratios Be smarter than ratings agencies and (b)analysts 3 3 3 3 3

4 3. Channels of crisis contagion
jeudi 20 novembre 2008 samedi 27 septembre 2008 samedi 27 septembre 2008 jeudi 20 novembre 2008 jeudi 20 novembre 2008 3. Channels of crisis contagion Through foreign trade (“monsoon effect”)‏ Global demand, prices, remittances, tourism. China can’t compensate US. Financial contagion CA deficits, currency slumps, balance sheet mismatches. “Pure” contagion (October 2008) breakdown of money and banking markets → generalised risk aversion → shedding of assets w/a public guarantees. Expectations matter 4 4 4 4 4

5 4. Channels of crisis vulnerability
jeudi 20 novembre 2008 samedi 27 septembre 2008 samedi 27 septembre 2008 jeudi 20 novembre 2008 jeudi 20 novembre 2008 4. Channels of crisis vulnerability Systemic sudden stops RER drop =f: Size of trade sector, external gap, portfolio integration. Partial insurance Reserves, debt management, local-currency bank debt. Strengthen your house even if you are innocent 5 5 5 5 5

6 5. Development finance in a deleveraged world
jeudi 20 novembre 2008 samedi 27 septembre 2008 samedi 27 septembre 2008 jeudi 20 novembre 2008 jeudi 20 novembre 2008 5. Development finance in a deleveraged world Impact of deleveraging Mid term: push 2/3; pull 1/3 With global growth down, flows down “Hunger for yield’ satisfied Time to rebuild bank capital → less bank credit FDI picks up post-crises Helped by SWFs (no debt leverage)? 6 6 6 6 6

7 5. Development finance in a deleveraged world
jeudi 20 novembre 2008 jeudi 20 novembre 2008 samedi 27 septembre 2008 samedi 27 septembre 2008 jeudi 20 novembre 2008 5. Development finance in a deleveraged world Multilateral ODA: The Comeback Kids? Aid to be curtailed? Deep slumps vs cycles IFIs will crowd back in… …But will it be enough? Can Asian FX reserves be leveraged through IFIs? Stimulate private-flow insurance Source: OECD Development Centre, based on World Bank Global Development Finance, 2008. 7 7 7 7 7

8 jeudi 20 novembre 2008 samedi 27 septembre 2008 samedi 27 septembre 2008 jeudi 20 novembre 2008 jeudi 20 novembre 2008 6. Global Governance Less reliance on international soft law (EITI, DSF)? Less influence for Wall Street/City → more regulatory independence? Less pro-cyclicality in bank capital regulation Less relevance for rating agencies More emphasis on guarantees and MDBs More emphasis on G20, less on G8, HDP, etc. Who represents Small Poor Countries? 8 8 8 8 8

9 7. Positive aspects of the global credit crisis?
jeudi 20 novembre 2008 samedi 27 septembre 2008 samedi 27 septembre 2008 jeudi 20 novembre 2008 jeudi 20 novembre 2008 7. Positive aspects of the global credit crisis? Lower fuel & food prices → More PP for poor, less government subsidies? Lower rents → less resource curse? Less chavismo? Tax heavens closed? More intergenerational justice as asset prices go down More talent allocated to real economy, less to finance 9 9 9 9 9

Download ppt "The consequences of the global economic and financial crisis:"

Similar presentations

1 Global Economic Crisis: What Can Small Open Economies Do? Asad Alam The World Bank AIPRG Conference, Yerevan July 7, 2009.

1 Global Economic Crisis: What Can Small Open Economies Do? Asad Alam The World Bank AIPRG Conference, Yerevan July 7, 2009.
OECD Seminar : 20 years after Panel 2 : Challenges and opportunities Júlia Király Deputy Governor, Magyar Nemzeti Bank.

OECD Seminar : 20 years after Panel 2 : Challenges and opportunities Júlia Király Deputy Governor, Magyar Nemzeti Bank.
Disclaimer: The views expressed herein are those of the author(s) and should not be attributed to the IMF, its Executive Board, or its management. Sub-Saharan.

Disclaimer: The views expressed herein are those of the author(s) and should not be attributed to the IMF, its Executive Board, or its management. Sub-Saharan.
EXCHANGE RATES AND EXTERNAL ADJUSTMENT Gian Maria Milesi-Ferretti International Monetary Fund.

EXCHANGE RATES AND EXTERNAL ADJUSTMENT Gian Maria Milesi-Ferretti International Monetary Fund.
“HOW CAN FINANCE TRANSFORM ECONOMIES TO HIGHER LEVELS OF DEVELOPMENT AND HOW TO AVOID THE PITFALLS OF EXCESSIVE FINANCIALISATION?” Debate at the World.

“HOW CAN FINANCE TRANSFORM ECONOMIES TO HIGHER LEVELS OF DEVELOPMENT AND HOW TO AVOID THE PITFALLS OF EXCESSIVE FINANCIALISATION?” Debate at the World.
March 2009 Future developments in Global Finance and the implications for the industry Paola Subacchi, Research Director, Chatham House.

March 2009 Future developments in Global Finance and the implications for the industry Paola Subacchi, Research Director, Chatham House.
Global Development Finance 2002 Financing the Poorest Countries.

Global Development Finance 2002 Financing the Poorest Countries.
The current financial crisis: Eastern Europe and Russia Jörg Mayer UNCTAD Study Tour for Russian Member Universities of the Vi Network Geneva, 24 March.

The current financial crisis: Eastern Europe and Russia Jörg Mayer UNCTAD Study Tour for Russian Member Universities of the Vi Network Geneva, 24 March.
FINANCIAL INTEGRATION AND ECONOMIC GROWTH OUTCOMES AND POLICIES FOR DEVELOPING COUNTRIES Select references: Prasad, Rogoff, Wei, Kose (2003); Kaminsky,

FINANCIAL INTEGRATION AND ECONOMIC GROWTH OUTCOMES AND POLICIES FOR DEVELOPING COUNTRIES Select references: Prasad, Rogoff, Wei, Kose (2003); Kaminsky,
The Financial Crisis and The Future of Financial Globalization Gian Maria Milesi-Ferretti International Monetary Fund, Research Dept. and CEPR.

The Financial Crisis and The Future of Financial Globalization Gian Maria Milesi-Ferretti International Monetary Fund, Research Dept. and CEPR.
GLOBAL IMBALANCES: DO NET CAPITAL FLOWS STILL MATTER? AN INTERNATIONAL MACROECONOMIC PERSPECTIVE Hélène Rey London Business School, CEPR and NBER De Nederlandsche.

GLOBAL IMBALANCES: DO NET CAPITAL FLOWS STILL MATTER? AN INTERNATIONAL MACROECONOMIC PERSPECTIVE Hélène Rey London Business School, CEPR and NBER De Nederlandsche.
Capital and Trade flows in Latin America and the Caribbean since the 2008 global crisis Daniel Titelman Director, Division of Financing for Development.

Capital and Trade flows in Latin America and the Caribbean since the 2008 global crisis Daniel Titelman Director, Division of Financing for Development.
Lecture 3: Emerging Markets and Elements of Country Risk Analysis.

Lecture 3: Emerging Markets and Elements of Country Risk Analysis.
Copyright © 2011 Pearson Addison-Wesley. All rights reserved. Chapter 9 Trade and the Balance of Payments.

Copyright © 2011 Pearson Addison-Wesley. All rights reserved. Chapter 9 Trade and the Balance of Payments.
CAPITAL INFLOW AND HOT MONEY Dianqing Xu China Center of Economic Research.

CAPITAL INFLOW AND HOT MONEY Dianqing Xu China Center of Economic Research.
Argentina/Mexico Case Study [GCP Brazil: Modulo 2]

Argentina/Mexico Case Study [GCP Brazil: Modulo 2]
Global financial crisis and emerging economies: impact and responses Valpy FitzGerald Global Economic Recovery: The Role of China and Other Emerging Economies.

Global financial crisis and emerging economies: impact and responses Valpy FitzGerald Global Economic Recovery: The Role of China and Other Emerging Economies.
Development implications of the financial and economic crisis SNIS Academic Council Debate Series Bern, 23.03.2009 Katja Hujo, Research Coordinator www.unrisd.org.

Development implications of the financial and economic crisis SNIS Academic Council Debate Series Bern, Katja Hujo, Research Coordinator
Capital Flows and Recent Financial Crises Lecture # 16 Week 11.

Capital Flows and Recent Financial Crises Lecture # 16 Week 11.
The Argentinean and Chilean experience. Pre-crisis developments Low interest rates in the United States in the early 1990s certainly provided an initial.

The Argentinean and Chilean experience. Pre-crisis developments Low interest rates in the United States in the early 1990s certainly provided an initial.

Similar presentations

Ads by Google