On October 13, 2012, nearly 250 leading public and private sector decision-makers considered how to prepare for the Future of the Global Economy during the Committee’s International Council meeting in Tokyo, Japan. The meeting also explored how shifting national and regional arrangements impact global attempts to reform the financial sector and where leadership and multilateral cooperation are needed to advance growth and stability.

The meeting began with a lively conversation between Wolfgang Schäuble, German Minister of Finance, Stefan Ingves, Governor of the Bank of Sweden and Chairman of the Basel Committee on Banking Supervision, and Wolfgang Münchau, Associate Editor of the Financial Times. Governor Ingves and Minister Schäuble agreed on the “step-by-step” advancement toward centralized European institutions and regulation, with Minister Schäuble accepting a future possibility in which “reliable” European-level regulators would be able to close down German banks, acknowledging that “if you need European structures, you have to deliver some parts of sovereignty.” At the same time, Governor Ingves emphasized the many lingering questions about the appropriate roles of national and international actors in supervision and crisis prevention.

Next, Masaaki Shirawaka, Governor of the Bank of Japan, Choongsoo Kim, Governor of the Bank of Korea, and Kazuyuki Sugimoto, Chairman of the Mizuho Research Institute, explored how existing interdependencies across Asia and geopolitical dynamics impact existing regional financial arrangements and collaboration. Moderated by David Hale, Chairman of David Hale Global Economics, the discussion detailed the financial and trade linkages among key countries in Asia and the role these ties can play in preventing or exacerbating financial crises. Participants agreed that, while political and social factors can have an influence, the economic interdependencies remain very strong and are ultimately positively reinforcing. To underline the point, Mr. Sugimoto noted that inter-Asian trade had increased tenfold in the last two decades and Governor Shirakawa related that “Asia’s global supply chain is interrelated and interdependent.” All panelists agreed that regional frameworks like the Chiang-Mai Initiative are playing an important role in promoting sustainable growth and reforms in Asia. At the same time, Governor Kim recognized the need for complementary initiatives on the global level to address international issues like surveillance, calling for “multilayered” safety nets.

Finally, under the guidance of moderator Jean-Claude Trichet, Christine Lagarde, Managing Director of the International Monetary Fund (IMF), reflected on the weekend’s official meetings, weighed in on global and regional growth projections and risks, and provided her thoughts on the role of the IMF in dealing with financial crises. Speaking specifically about the crisis in the Eurozone, she urged that “good policy decisions have been made, but [now] action is needed.” She also outlined ways in which the IMF is adapting its policies based on data and its tools, such as the Flexible Credit Line and the Precautionary and Liquidity Line, to meet the changing needs of its members.

Watch the 2012 International Council Meeting

The Committee owes many thanks to the Japanese Ministry of Finance, the Japan Credit Rating Agency, and the IMF Secretariat and External Relations teams for their guidance and assistance in the preparation of this program.

The 2012 International Council program was made possible through the contributions of its strategic partner and sponsors:

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