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. Current crisis impact on development finance • RBS estimate: outflows 2008 equal to 1/5 of 2003 -07 inflows (1 trn. $) • Portfolio equity & bond outflows • Commercial bank credit • Trade credit • FDI, M&A Systemic Sudden Stop • Calvo, Izquierda, Mejia, NBER Working Paper No. 14026 OECD Development Centre 2
2. Lessons for the diagnosis of policy performance • • From decoupling to contagion, from hyperbole to endogeneity/cyclicality • FX reserve levels – Not huge forever – Currency defense – Bank recapitalisation cost • Public budgets – Deficits → FX rates, Y → debt ratios GDP growth rates – “Green” vs ‘black’ accounting – Low risk spreads – High commodity prices Be smarter than ratings agencies and (b)analysts OECD Development Centre 3
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 OECD Development Centre 4
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 OECD Development Centre 5
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)? OECD Development Centre 6
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. OECD Development Centre 7
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 G 20, less on G 8, HDP, etc. • Who represents Small Poor Countries? OECD Development Centre 8
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 OECD Development Centre 9
Скачать презентацию Global Forum on Development The consequences of the
8ff098e0e4dfcbf983bc579a4087380d.ppt