Rethinking Regulation in Light of the Financial Crisis
By Yaga Venugopal Reddy
There is a recognition that policies relating to regulation of the financial sector must optimise the benefits of the financial sector while minimising the costs or risks associated with it. There are several dimensions to striking this balance, which this august audience is well aware of and involved with. I selected three themes for consideration today: the optimal level of financialisation, appropriate innovation in the financial sector, and the effectiveness of financial sector regulation.
Staring with Malaysia in 2003, many Asian countries are now taking actions to promote cheaper medicines through compulsory licensing, with Indonesia being the latest case. (more…)
The latest round of UNFCCC climate negotiations in Bangkok in September has revealed a major problem. The Bali Road Map launched in December 2007 had 2 tracks. The Kyoto Protocol track seems to be ending in a very weakened outcome, while the Bali Action Plan track is in danger of being killed without a proper closure or a transfer of its unsettled issues.
South facing unfavourable global conditions; rethinking growth strategies is imperative
By Yilmaz Akyüz
The high-growth performance of many developing countries in 2003 to 2008 and then their quick recovery from the 2008-9 global financial crisis was largely due to favourable external conditions, including the policies in developed countries. (This was analysed in the previous issue of South Bulletin). However, these conditions do not exist today and in fact the global conditions have turned unfavourable. Hence developing countries are now facing serious vulnerabilities and risks to their economic situation, with each category of countries facing their own specific problems. Developing countries have to consider changing their growth and development strategies, in light of the changing global situation.
Statutory Sovereign Debt Workout Mechanisms: Why and How?.
Because of the absence of a multilaterally agreed legal system for debt workouts, the practice tends to be ad hoc and disorderly, generally favouring creditors. Often the IMF is involved in coordinating and resolving debt servicing difficulties, be it due to solvency or liquidity problems, based on an adjustment programme agreed with the debtor country. (more…)
Financial Instability as a Threat to Sustainable Development.
As seen over and again during recurrent financial crises in both developing and advanced economies (DEs and AEs), including the recent global crisis originating in the US and Europe, financial instability and boom-bust cycles undermine all three ingredients of sustainable development – economic development, social development and environmental protection. (more…)
India to increase supply of free generic medicines: some key issues
By Nirmalya Syam
Recent reports indicate that the Indian government plans to increase manifold its spending on procurement of generic medicines for supply free to patients. This is welcome news. However, it is important to ensure future supply of generic medicines by addressing the present problems facing the Indian drug industry.
Developing countries are increasingly being adversely affected by the economic recession in Europe and the slowdown in the United States.
The hope that major emerging economies like China, India and Brazil would continue to have robust growth, de-coupling from Western economies and becoming an alternative engine of global growth has been dashed by recent data showing that they are themselves weakening.
Since January 2012, aviation has been included in the European Union’s Emissions Trading Scheme (ETS). The Aviation ETS requires aircraft operators to surrender one allowance per tonne of carbon-dioxide emitted on a flight to and from (and within) the EU. (more…)
What Explains the South’s Recent High Growth — And Can It Continue?
By Yilmaz Akyüz
Recently there emerged a view that developing countries had “de-coupled” their economies from the developed countries and had taken off to a path of high growth. But this is an overly-optimistic view. This article by the South Centre’s Chief Economist examines the growth record of developing countries and analyses how the good performance was based mainly on external factors that no longer exist. The next issue of SouthViews will have a follow-up article on the need for a new development strategy in the South.
Re-making Financial Policy to Meet Society’s Needs
By Yaga Venugopal Reddy
The future of finance, and in particular saving it from a popular backlash against the global financial crisis and related crisis-management policies, has rightly become a matter of great concern. There is broad agreement that finance has, as in the past, the potential to do good, which should be harnessed by all. However, it is essential to minimise its potential to do harm. From a central banker’s point of view, there are several issues in this search for good finance for the future, but there are three inter-related issues that I want to comment on today: (a) how to ensure that the financial sector serves the society better; (b) how to integrate financial sector policies better with national economic policies; and (c) how to ensure that the financial industry functions as a means and not as an end in itself?
Re-making Financial Policy to Meet Society’s Needs
By Yaga Venugopal Reddy
The financial sector has been hit by major crises and scandals, to the point that its credibility with the public has fallen to historically low levels. A re- thinking and re-making of financial policies and the role of financial institutions is thus urgently needed. This was the theme of a lecture presented by the distinguished former Governor of the Reserve Bank of India, Yaga Venugopal Reddy, which was made in conjuncture with the 2012 Annual General Meeting of the Bank for International Settlements held in Basel, Switzerland. The 2012 Per Jacobsson Foundation Lecture by Mr Reddy, made on 24 June 2012, covered three main themes: (1) Society and Finance, (2) Economic Policies and the Financial Sector, and (3) Regulation of the Financial Sector.
Below is the first part of the lecture, on Society and Finance. Future issues of SouthViews will publish the other two parts of the lecture.
