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International Financial Issues in Emerging Markets
The global financial crisis illustrates the relevance of international financial links among countries and their impact on the world economy.This interconnectedness poses unique challenges for policymakers and researchers alike. With these challenges in mind,SIPA and the Inter-American Development Bank (IADB) co-hosted leading policymakers and practitioners from around the world for an executive training program – International Financial Issues in Emerging Markets.
The program took place in April 2010, and was intended to lead to capacity building in emerging markets. The course featured hands-on tools and applications, teaching participants how to design and implement macroeconomic and financial policies in a cohesive and comprehensive fashion, based on the state-of-the-art emerging-market knowledge.
Participants traveled from emerging market nations such as Spain, Croatia, Colombia, Brazil, and several other Latin American nations, and included representatives from international financial institutions. The course covered macro-financial analytical issues and provided quantitative tools such as growth vulnerability to external factors, international liquidity and vulnerability to financial crises, fiscal vulnerability to Sudden Stops, and banking stress tests.
“I thought it was a very good program, in particular the discussions of sustainability and capital inflows on economies,” said Elliott Murphy, an economist with the Caribbean Development Bank. “The information will help us analyze and separate the impact of the global financial crisis from the impact of the economic policies enacted in response to the crisis.”
The sessions were led by a group of experts in the field from Columbia University, the University of Maryland, IADB, CERES, and the International Monetary Fund bringing together the appropriate focus, theory, and best-practice methods in training. The International-American Development Bank’s INDES institute provided fifteen fellowships for Latin American participants, instrumental in bringing high-quality policy makers from the region.
“Many of the classes were successful in stressing how standard policies need to be revisited under systemic financial turmoil,” said Alejandro Izquierdo, principal economist with the IADB’s research department. “Orthodox instruments that will work in normal times may become irrelevant, calling for different instruments and approaches to policy.”
“I think the course worked because it was able to put together a set of issues typically in the mind of policy makers in times of financial turmoil, such as international liquidity management, monetary and fiscal policy, debt management, etc, in a consistent framework aimed at highlighting vulnerabilities to crisis and appropriate policy responses.”
SIPA and the IADB expect to collaborate on a similar program in 2011, with hopes of bringing greater representation from other regions, such as Asia and Eastern Europe.