Global Financial Flows after the Great Recession

Conference cohosted by the Peterson Institute for International Economics and Booz Allen Hamilton in Washington, DC

Jeremy Lawson, Institute of International Finance
William R. Cline, Peterson Institute
J. W. Rust, Booz Allen Hamilton
Kristin Forbes, Massachusetts Institute of Technology
Kathleen Sifer, Booz Allen Hamilton
Antoine van Agtmael, Emerging Markets Management, LLC
James Harmon, Caravel Management, LLC
Todd Moss, Center for Global Development

Peterson Institute for International Economics, Washington, DC

March 10, 2011

The Peterson Institute and Booz Allen Hamilton (BAH) cohosted a conference "Global Financial Flows after the Great Recessio" on March 10, 2011. William Wansley of Booz Allen Hamilton and C. Fred Bergsten, director of the Peterson Institute, introduced the session. David Rubin of Booz Allen Hamilton gave the concluding remarks.

Financial flows to emerging market economies have traced a roller-coaster ride from a peak in 2007 to a sharp downswing in 2008–09, followed by strong recovery in 2010. The recent buoyant pace of financial flows has prompted new concerns about possibly excessive and destabilizing inflows, and spurred many including the International Monetary Fund (IMF) to revisit the question of appropriate prudential policies toward capital mobility. At the same time private flows seem increasingly to promise a new source of dynamism for growth in poorer countries previously dependent on official assistance.

The first conference session focused on flows to emerging market economies. Jeremy Lawson of the Institute of International Finance (IIF) presented the IIF's widely followed projections of capital flows. William R. Cline of the Peterson Institute presented the principal findings of his new book Financial Globalization, Economic Growth, and the Crisis of 2007-09. J.W. Rust of Booz Allen presented the BAH model for assessing financial sector risk in developing countries. Marcos Chamon of the IMF commented on the three presentations and outline the IMF's emerging new approach on prudential controls.

The second session addressed private financial flows to Africa. Two eminent figures from the private financial sector whose firms have invested extensively in Africa over the past decade, Antoine van Agtmael (who invented the term "emerging markets" at the World Bank in the 1980s) and James Harmon (former president of the US Export-Import Bank), evaluated the recent and prospective contribution of private foreign capital to the region's development. Todd Moss of the Center for Global Development provided perspective on the respective roles of official and private capital flows to Africa.

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