Globalization has advanced much faster in finance than in trade. But as the experience of recent years shows international financial markets have a potential to destabilize exchange rates and to render economic policy-making more difficult. Financial flows have come into conflict with domestic monetary policy objectives with increasing frequency, greatly restricting policy autonomy. While they offer opportunities for financing economic development, there is widespread concern that the increasing integration of financial markets might provide benefits to only a minority of the world´s population and countries, and at the price of increased instability and vulnerability.
The impact of rising global capital flows on the stability of international financial markets and on economic development will be the focus of discussions among some 30 academic experts and market practitioners from all regions at a conference from 8 to 9 March, hosted by the Jerome Levy Economics Institute, a leading academic institution in the United States. The conference is also sponsored by UNCTAD and the Intergovernmental Group of Twenty-four on International Monetary Affairs (G-24). It will take place at Blithewood Mansion, Bard College, Annandale-on-Hudson, New York. The findings of the conference will provide a substantive input to UNCTAD IX, which will be held in Midrand, South Africa, from 27 April to 11 May, with globalization and liberalization as the main theme. The conference at the Levy Institute is linked to UNCTAD´s ongoing research on the implications of international capital flows for interdependence and development.
The conference will discuss the challenges and opportunities presented by the liberalization and globalization of financial markets. It will examine the extent to which greater financial openness in developing countries has increased the influences exerted by international capital markets, and discuss possible national policy responses to manage financial integration. It will draw lessons from recent experience in the different regions of the developing world, addressing in particular the impact of different capital account regulations on macroeconomic policies and performance. Another subject of the conference will be options for international regulation of capital flows and proposals to reduce destabilizing short-term flows, such as the so-called Tobin tax. The role of the IMF, the World Bank, the Bank for International Settlements, and other international financial institutions in the changed environment, and the implications of financial globalization for their mandates and the coordination of their work will also be discussed by the experts gathered at the Levy Institute.
