World Trade and Exchange Rates From the Pax Americana to a Multilateral New Order LORD MERVYN KING Former Governor of the Bank of England SEVENTEENTH ANNUAL STAVROS NIARCHOS FOUNDATION LECTURE AND DINNER TUESDAY, MAY 16, 2017 About the Stavros Niarchos Foundation Lecture Series The annual Stavros Niarchos Foundation Lecture Series at the Peterson Institute for International Economics was established in 2001 through the generous support of the Stavros Niarchos Foundation. The Series enables the Institute to present a leader of world economic policy and thinking for a major address each year on a topic of central concern to the US and international policy communities. The Series’ inaugural lecture was delivered by Alan Greenspan, former chairman of the Federal Reserve Board, in 2001. The list of subsequent speakers includes Ernesto Zedillo, former President of Mexico, in 2003; Lawrence H. Summers, former Secretary of the Treasury and Chair of the National Economic Council, in 2004; Long Yongtu, former Vice Minister of China’s Ministry of Foreign Trade and Economic Cooperation, in 2005; Mario Monti, former Prime Minister of Italy, in 2006; Heizō Takenaka, former Minister for Economic Policy of Japan, in 2007; Petr Aven, former President of Alfa Bank, in 2008; Nandan M. Nilekani, former Co- Chairman of the Board of Directors, Infosys Technologies, LTD, in 2009; Niall Ferguson, Laurence A. Tisch Professor of History, Harvard University, in 2010; John Lipsky, former First Deputy Managing Director of the International Monetary Fund, in 2011; Jean-Claude Trichet, former President of the European Central Bank, in 2012; C. Fred Bergsten, Senior Fellow and Director Emeritus, Peterson Institute for International Economics, in May 2013; Antonis Samaras, former Prime Minister of Greece, in October 2013; Mari Elka Pangestu, former Minister of Tourism and Creative Economy of Indonesia, in 2014; Agustín Carstens, Governor of the Bank of Mexico, in April 2015; David Lipton, First Deputy Managing Director of the International Monetary Fund, in May 2016; and Lord Mervyn King, British Economist and former Governor of the Bank of England, May 2017. 2 Stavros Niarchos Foundation Lecture Series | Seventeenth Annual LORD MERVYN KING | World Trade and Exchange Rates 3 The Stavros Niarchos Foundation [(SNF) (www.SNF.org)] is one of the world’s leading private, international philanthropic organizations, making grants in the areas of arts and culture, education, health and sports, and social welfare. Since 1996, SNF has committed $1.9 billion, through 3,801 grants to nonprofit organizations in 112 nations around the world. The Foundation funds organizations and projects that are expected to achieve a broad, lasting and positive impact for society at large, and exhibit strong leadership and sound management. The Foundation also supports projects that facilitate the formation of public-private partnerships as an e¨ective means for serving public welfare. In addition to its standard grants, the SNF has continued to respond to the urgent needs of Greek society, by providing relief against the severe e¨ects of the socioeconomic crisis through three major grant initiatives of $378 million. The Foundation’s largest single gift is the Stavros Niarchos Foundation Cultural Center (SNFCC), in Athens. The project’s total cost is $861 million. The SNFCC is designed by the renowned architectural firm Renzo Piano Building Workshop, and includes the new facilities of the National Library of Greece, and Greek National Opera, as well as the Stavros Niarchos Park. The Center was delivered to the Greek Society on February 23rd, 2017. Following the handover, the SNF announced its commitment to continue supporting the SNFCC for the next five years, through grants totaling up to $53 million. The grants support the implementation of public programming and help cover part of SNFCC’s operational costs. All events funded with SNF support are free to the public. The SNF does not engage in any “for profit” activities in Greece or abroad, and it is audited by Deloitte. LORD MERVYN KING | World Trade and Exchange Rates 3 Program 5:30 pm WELCOME DR. ADAM S. POSEN President, Peterson Institute for International Economics MR. ANDREAS DRACOPOULOS Co-President and Director, Stavros Niarchos Foundation THE HONORABLE PETER G. PETERSON Chairman, Peterson Institute for International Economics THE HONORABLE LAWRENCE H. SUMMERS Charles W. Eliot University Professor and President Emeritus, Harvard University LECTURE, Q & A LORD MERVYN KING Former Governor of the Bank of England 6:45 pm RECEPTION In the Anthony M. Solomon Sculpture Garden 7:15 pm DINNER By invitation only 8:30 pm CLOSING DR. ADAM S. POSEN President, Peterson Institute for International Economics 4 Stavros Niarchos Foundation Lecture Series | Seventeenth Annual LORD MERVYN KING | World Trade and Exchange Rates 5 About Lord Mervyn King LORD KING OF LOTHBURY, KG, GBE, FBA Mervyn King served as Governor of the Bank of England and Chairman of the Monetary Policy Committee and Financial Policy Committee from 2003–June 2013. He was previously Deputy Governor from 1998 to 2003, Chief Economist and Executive Director from 1991, and non- executive director of the Bank from 1990 to 1991. He was knighted (GBE) in 2011, made a life peer in 2013, and appointed by The Queen to be a Knight of the Garter in 2014. Lord King took up a position as Professor of Economics and Law at New York University in September 2014, and a position as School Professor of Economics at the London School of Economics in 2015. Born in 1948, Mervyn King studied at King’s College, Cambridge, and Harvard (as a Kennedy Scholar) and taught at Cambridge and Birmingham Universities before spells as Visiting Professor at both Harvard University and MIT. From October 1984 he was Professor of Economics at the London School of Economics where he founded the Financial Markets Group. Mervyn King is a Fellow of the British Academy, an Honorary Fellow of King’s and St John’s Colleges, Cambridge and holds honorary degrees from Birmingham, Cambridge, City of London, Edinburgh, London Guildhall, London School of Economics, Wolverhampton, Worcester, Helsinki, Abertay, Dundee and Kent Universities. He is a Foreign Honorary Member of the American Academy of Arts and Sciences, is on the Advisory Council of the London Symphony Orchestra, is President of Worcestershire County Cricket Club and a Trustee of the National Gallery. 6 Stavros Niarchos Foundation Lecture Series | Seventeenth Annual LORD MERVYN KING | World Trade and Exchange Rates 7 About Lord Mervyn King LORD MERVYN KING | World Trade and Exchange Rates 7 About the Peterson Institute for International Economics The Peterson Institute for International Economics is a private nonpartisan, nonprofit institution for rigorous, intellectually open, and indepth study and discussion of international economic policy. Its purpose is to identify and analyze important issues to make globalization beneficial and sustainable for the people of the United States and the world, and then to develop and communicate practical new approaches for dealing with those issues. The Institute attempts to anticipate emerging issues and to be ready with practical ideas, presented in useful and accessible formats, to inform and shape public debate. Its audience includes government o°cials and legislators, business and labor leaders, management and sta¨ at international organizations, university-based scholars and their students, experts at other research institutions and nongovernmental organizations, the media, and the public at large. It addresses these groups globally from its home in Washington, DC. The Institute’s sta¨ of about 70 includes 20 senior researchers, as well as 15 nonresident fellows, all distinguished for their combination of research expertise and policy experience. The Institute’s agenda emphasizes international trade and investment, international finance and exchange rates, macroeconomic policy and crisis response, globalization and human welfare, and studies of key economic regions. Institute sta¨ have unique expertise on the major economies with special reference to China, the European Union, India, Japan, Korea, Russia, and the Middle East, as well as the United States itself and its NAFTA partners. 8 Stavros Niarchos Foundation Lecture Series | Seventeenth Annual LORD MERVYN KING | World Trade and Exchange Rates 9 Current priorities include: > adoption of international banking standards and broader financial regulatory reforms; > improving macroeconomic policy after the global financial crisis; > countercyclical fiscal policy and increased female labor force > truth telling about the benefits of globalization and the costs of closed participation in Japan; economies; > the restoration of trade promotion authority in the United States; and > the rebalancing of China’s growth model and its impact on the world economy; > linking fiscal stimulus and structural reform in the euro area. > globalization, inequality, and labor market adjustment; Other influential analyses have addressed: > exchange rate interventions and reform of the international monetary > economic reform in the European Union, the former communist system; countries, and Latin America (including what became known as the > regional trade agreements and multinational investment, notably the Washington Consensus); Trans-Pacific Partnership (TPP); > foreign direct investment into and out of the United States; > practical growth models for Europe, Japan, and the United States; and > the