Finding Way out of Another Financial Crisis wkf2011 l 2011.08.23

The US - the world’s largest economy - has been banking on quantitative easing and excessive borrowing to haul its economy out of the 2008 global financial crisis. As its quest for growth turns elusive, however, fear is spreading regarding the possibility of another global turmoil.

In this economic climate, Maeil Business Newspaper has invited the world’s leading financial experts to the 12th World Knowledge Forum (WKF) to shed light on possible solutions. Speakers in the session will include four current officials from global financial institutions like the IMF and the World Bank, as well as ex-finance ministers from the US, Japan, the UK, and Russia.

Solutions suggested by international organization officials

What course will the People’s Bank of China (PBC), the largest holder of US Treasury bonds, take? Xia Bin, member of China’s central bank monetary policy committee since March 2010 and Finance Chief at China’s cabinet-rank Development Research Centre, will be attending the WKF to provide deeper insight on China’s response. Xia is famed in China for his unrestrained criticisms based on economic principles, and has also been advising the PBC to sell off dollar-based bonds before the current shake-up.

This session will also feature IMF Deputy Managing Director Naoyuki Shinohara; World Bank Vice President for East Asia and Pacific James Adams; and former Finance Minister of Egypt and current Managing Director of the World Bank Mahmoud Mohieldin, as speakers. These frontline officials of global financial order will discuss new responses to the global shock brought on by US credit downgrading.

Gaining financial acumen from former finance ministers

Former finance ministers who have sailed through similar calamities in the past may offer invaluable insights. This year, the WKF invited a band of heavyweight former finance ministers from all around the world. One of these big wheels is Gordon Brown, former Prime Minister of the UK, celebrated for bringing stable economic growth to the UK during his tenure as Finance Minister.

John Gieve, former Deputy Governor of the Bank of England and current Chairman of VocaLink, is another notable guest. Using his experience in managing the nation’s monetary policy, Sir John Gieve is also acting as senior advisor to GLG Partners, a hedge fund belonging to Man Group. He is frequently referred to as an expert with the most objective macroeconomic assessments.

Professor Larry Summers - Professor of Harvard University, former US Secretary of Treasury, and President Obama’s top economic adviser - will also be visiting Seoul to attend the forum. Summers is famous for his recent comments on US default, when he coined the term “financial Armageddon” to warn against failure to raise the debt ceiling.

Heizo Takenaka, Japan’s former Minister of State for Economic and Fiscal Policy under Prime Minister Koizumi, will also take to the podium to analyze the risks of varied growth in the world. Takenaka also served as Minister of State for Financial Services, during which he is credited for pulling Japan out of its decade-long slump. Takenaka took an unprecedented hard-ball stance against Japan’s moribund banks, forcing them to write down all bad loans. His current policy outlook is aimed at further financial stabilization.

[2011.08.22 Written by Hyun-gyu Shin - Samji Chung / edited by Soyoung Chung]

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