Background
The global economy is now rebounding from the crisis. There is a widespread belief that the worst of the global crisis is over as output and trade is back to pre-crisis levels in 2010 in most of the emerging and developing world, whereas the OECD countries still suffer from low growth and high fiscal deficits. Unprecedented expansionary fiscal policies to stimulate demand and large interest rate cuts to inject liquidity in the market, domestic as well as international, to sustain credit have helped lower uncertainty and systemic risk in financial markets. However, there is no consensus in the path of recovery as global imbalances persist and major regulatory reforms are still debated.

The key issues at this juncture are unsustainable fiscal expansion, inflationary pressure in some countries, appropriate time for exit extraordinary levels of public intervention, global cooperation to check macroeconomic imbalances and the quest for a new global regime for coordinated regulation of the financial industry.

Conference Concept
The conference, firstly, took stock of the major reports on the reform of the global financial system and the implementation of suggestions thereof in the G20 process; secondly, key issues such as the major fiscal, monetary and regulatory initiatives around the world after the crisis were discussed. Given the different impact of the crisis in the OECD countries and the emerging and developing economies, it is imperative to contemplate some of the country and regional crisis and reform experience, especially in the EU and Asia. 

Against this backdrop, the conference aimed to bring together distinguished policymakers, regulators, practitioners and academicians for a dialogue on important questions at this juncture. What is the consensus on the regulation of financial markets on the background of the recommendations of major reports and the G20 process? What are the measures recommended by multilateral agencies such as IMF, BIS and FSB? What are the reforms undertaken in the advanced economies such as EU and US and in the developing countries in Asia especially in India and China. And finally, what are the exit and growth strategies, taking into account the need for global rebalancing?

Inaugural Address
Dr. Duvvuri Subbarao, Governor of the Reserve Bank of India, gave the Inaugural Address. In his speech, Governor Subbarao addressed the “Frontier Issues on the Global Agenda”. Dr. Subbarao emphasised how global cooperation is vital to reach a shared understanding on redressing imbalances, exchange rate flexibility and management of capital flows. Given the strength and pace of globalisation, he maintained that purely national solutions are not only inadequate but may indeed be counterproductive. His speech can be found here.

The ICRIER-DIE-InWEnt-conference brought together distinguished policymakers, regulators, practitioners and academicians for a dialogue on important questions at this juncture.

The conference was part of a InWEnt-DIE conference series on financial market stability in major emerging markets.