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Central Bank Cooperation at the Beginning of the 21St Century CEMLA 60Th Anniversary Conference

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Central Bank Cooperation at the Beginning of the 21St Century CEMLA 60Th Anniversary Conference Central Bank Cooperation at the Beginning of the 21st Century CEMLA 60th Anniversary Conference YEARS 1952-2012 Central Bank Cooperation at the Beginning of the 21st Century Central Bank Cooperation at the Beginning of the 21st Century CEMLA 60th Anniversary Conference Mexico City, July 19-20, 2012 60th anniversary conference v YEARS 1952-2012 Centro de Estudios Monetarios Latinoamericanos Durango 54 Colonia Roma Norte Delegación Cuauhtémoc 06700 México D. F. México <www.cemla.org> © 2013, Centro de Estudios Monetarios Latinoamericanos Any copy or reproduction, retransmission, or re-diffusion, total or partially and through any media, of the content of this book is completely forbidden without previous written authorization from CEMLA. Editorial and translations coordination by the Information Services Management, CEMLA. First Edition, 2013 ISBN 978-607-7734-51-2 México vi CEMLA Table of Contents Preface ............................................................................. xi OPENING REMARKS Javier Guzmán Calafell ..................................................... 3 KEYNOTE ADDRESS Central Bank Cooperation: A Latin American Perspective José Darío Uribe E. .......................................................... 11 PANEL 1 INTERNATIONAL MONETARY STABILITY AND CENTRAL BANK COOPERATION Presentation Paulo Vieira da Cunha ...................................................... 23 Central Bank Cooperation and International Monetary System: European Lessons Josh Felman ..................................................................... 29 Caveat Creditor Philip Turner ..................................................................... 37 Interregional Financial Cooperation: Another Layer of Financial Cooperation toward Financial Stability Kiyohiko G. Nishimura ...................................................... 57 Monetary Stability and Central Bank Cooperation Daniel Heller ..................................................................... 75 60th anniversary conference vii PANEL 2 CENTRAL BANK COOPERATION: THE EXPERIENCE OF EMERGING AND DEVELOPING ECONOMIES Central Bank Cooperation: The Experience of Emerging and Developing Economies Emsley Tromp .................................................................... 87 Financial Crisis and Central Banks: Impact on Inflation Targeting and Independence Mario I. Blejer .................................................................... 95 Central Bank Cooperation: The Experience of Emerging and Developing Economies (Central American Economies) Julio Suárez ...................................................................... 99 PANEL 3 TECHNICAL COOPERATION AMONG CENTRAL BANKS Presentation Jorge Roldós ..................................................................... 107 Technical Central Cooperation among Central Banks: The Case of the Bundesbank Jürgen Sterlepper ............................................................. 111 Technical Cooperation among Central Banks: SEACEN’s Experience Hoo-Kyu Rhu ...................................................................... 119 Technical Cooperation among Central Banks: The Case of CEMLA Javier Guzmán Calafell ..................................................... 121 viii CEMLA KEYNOTE ADDRESS Central Bank Cooperation at the Beginning of the 21st Century Agustín Carstens .............................................................. 149 PANEL 4 CENTRAL BANK COOPERATION IN TIMES OF CRISIS: LESSONS FROM THE RECENT EXPERIENCE Presentation Juno Kang ......................................................................... 157 Central Bank Cooperation in Times of Crisis Elizabeth A. Duke ............................................................. 159 Short-term Crisis Management and Long-term Vision: How Europe Responds to the Crisis Benoît Cœuré ................................................................... 169 Central Bank Cooperation in Times of Crisis: Lessons from Recent Experience Pedro Duarte Neves ......................................................... 177 Cooperation among Central Banks during Crises: Lessons from the Recent Experience Manuel Ramos-Francia and Santiago García-Verdú ........ 191 KEYNOTE ADRESS Central Bank Cooperation: Reflections on the Experience of the Last Eight Decades Jaime Caruana ................................................................. 209 60th anniversary conference ix PANEL 5 GLOBAL FINANCIAL STABILITY AND CENTRAL BANK COOPERATION: WHAT HAVE WE LEARNED? Presentation Manuel Sánchez González ............................................... 223 Global Financial Stability and Central Bank Cooperation: What Have We Learned? Miguel Pesce .................................................................... 229 Global Financial Stability and Central Bank Cooperation. Lessons Learned Marc-Olivier Strauss-Kahn ................................................ 235 ROUNDTABLE WHERE IS CENTRAL BANK COOPERATION HEADED? Presentation Guillermo Ortiz .................................................................. 247 Economic Education, Financial Intelligence and Central Bank Cooperation: The Answer to Current Challenges Mario Bergara ................................................................... 249 Where Is Central Bank Cooperation Headed? Rodrigo Bolaños Zamora .................................................. 255 Where Is Central Bank Cooperation Headed? Pilar L’Hotellerie-Fallois .................................................... 261 x CEMLA Javier Guzmán Calafell Preface he Conference on Central Bank Cooperation at the Beginning of T the 21st Century was held on July 19 and 20, 2012, as part of cel- ebrations to commemorate the 60th anniversary of the Center for Latin American Monetary Studies (CEMLA). On these days, authorities from our associate and collaborating institutions, international organizations and special guests, gathered at CEMLA’s offices in Mexico City to de- bate different aspects of central bank cooperation. In recent decades the topic of central bank cooperation has become more important as globalization has progressed and financial systems have become more closely interdependent. However, this issue has also gained relevance due to the international financial crisis that broke out a few years ago, given that unprecedented means of intervention and coordination among governments, central banks and international organizations have been required to address it. The Conference program was aimed at providing both comprehen- sive view: the topic of cooperation was addressed from both histori- cal and theoretical standpoints, and, above all, from the perspective Director General, CEMLA. 60th anniversary conference xi challenges that the recent financial crisis represented for monetary policymakers in each country and on regional and global scales. In order to learn from the lessons of the past, some presentations dealt with the history of central bank cooperation since the 19th centu- ry and the most significant moments in the institutionalization of mon- etary and international financial cooperation processes during the 20th century. In particular, the experiences of cooperation among central banks in Europe, Latin America and the Caribbean, and Asia were analyzed. In Latin America and the Caribbean, the history of cooperation goes back to 1931 when the first conference of the region’s central banks was held. These efforts eventually led to the founding of CEMLA in 1952 and were complemented by the setting up of institutions such as the Central American Monetary Council in 1964, the Latin American Re- serve Fund in 1976, and the Latin American Integration Association in 1982. The current crisis has therefore tested the functionality of coopera- tion mechanisms around the world. In this regard, the conference em- phasized the potential and limits of central bank cooperation in times of crisis, analyzing the coordinated actions taken by some advanced countries during the most critical moments of the financial emergency, as well as the different economic and monetary policy dilemmas faced by advanced and emerging economies as a result of the crisis. It was repeatedly stressed throughout the Conference that, although coordination and cooperation clearly have positive benefits, specific mandates and particular historical, social and economic environments can sometimes limit central bank cooperation. In fact, the crisis pos- es very different problems for advanced and emerging countries, and measures for solving problems in one group of countries might trans- late into sources of vulnerability for others. Thus, increasing the ex- change of information, international technical cooperation and, where appropriate, encouraging coordinated actions, constitutes one of the greatest current challenges. Overcoming these challenges will contrib- ute to better preserve the stability of the international financial system. xii CEMLA The Conference was very important for CEMLA. The Center is the oldest monetary cooperation organization and that with the greatest coverage in Latin America and the Caribbean. Throughout its now more than six decades, CEMLA has provided a forum for its members to exchange ideas and experiences, receive update and technical as- sistance programs, improve the training of their staff, have access to sources of research on monetary and financial matters, and, gener- ally, adopt better practices allowing them to carry out their tasks more effectively. This Conference, which brought together some of the most impor- tant central bank players
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