BRAZIL INVESTMENT NEWS

June 30, 2010 at 10:32 pm | Posted in Brazil, Economics, Financial, Research | Leave a comment

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BRAZIL INVESTMENT

BVMF News

bvmf@bvmf.com.br

Wed 6/30/10

Number 15, June 2010

Complete Version

Brazil Easy Investing” will allow foreign investors to order routing in their local currencies
BM&FBOVESPA and Chi-X Global are jointly developing an order routing software designed for the trading of Brazilian equities in foreign currencies.

Launch of five new Currency Futures Contracts in the BM&F segment for trading
Australian Dollar (AUD), Canadian Dollar (CAD), Japanese Yen (JPY), Pound Sterling (GBP) and Mexican Peso (MXN) contacts are authorized for trading.

DMA trading reaches historic levels in the BM&F segment
Derivatives trading via Direct Market Access (DMA) set a new record in May, with 20,949,961 contracts traded in 3,040,357 trades. Other records were set during the same period.

Bidding Process for the selection of a manager for the new financial ETF
Interested financial entities must submit their proposals by no later than July 19th. The winning bidder will be the entity that provides the highest value commitment.

Important agreement to stimulate the relationship between entrepreneurs and investors
The partnership of BM&FBOVESPA and São José dos Campos Technology Park hopes to establish a culture of entrepreneurship and innovation, through professional training.

Brazil elected as the most trustworthy country among the developing nations for doing business
A survey of investors from all over the world showed that they considered Brazil to be the developing country with the best corporative governance.

WFE Working Committee Meeting will be hosted by BM&FBOVESPA
BM&FBOVESPA will host the World Federation of Exchanges (WFE) Working Committee on July, 1st and 2nd, in São Paulo. Main topic to be discussed will be “Sustainable Investment” Corporate Sustainability Index (ISE) completes five years with enhancements to the next portfolio
The companies listed on ISE are recognized for their high level of commitment to sustainability and social responsibility.

MARKET RESULTS – BM&F Segment May 2010
The derivatives market segment totaled 52,063,826 contracts and BRL3.57 trillion in volume. The average daily trading volume in the derivatives markets was 2,479,230.

MARKET RESULTS – BOVESPA Segment May 2010
The equities market segment reached a total volume of BRL152.93 billion, in 10.261.145 trades, setting a new record, with daily averages of BRL7.28 billion and 488,626 trades.
BM&FBOVESPA international representative offices

Contact information:

New York:
Mr. Marcelo Gualda
Phone: 212-750-4197
e-mail: mgualda@bvmf.com.br

London:
Ms. Cathryn Lyall
Phone: 44-208-528-1082
e-mail: clyall@bvmf.com.br

Shanghai:
Mr. Guey Chien
Phone: 86-21-5037-2886
e-mail: guey@bmfrepo.com.cn

Sao Paulo:
Ms. Lucy Pamboukdjian
Phone: 55-11-2565-7010
email: lpambouk@bvmf.com.br

BM&FBOVESPA

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CAMBRIDGE FORECAST GROUP ESSAY: “CIVETS” AND “BRICS” AS THE NEXT LOCOMOTIVE OR ENGINE OF THE GLOBAL ECONOMY?

June 30, 2010 at 12:46 am | Posted in Brazil, China, Development, Economics, Financial, Globalization, History, India, Research, Russia, Third World, World-system | Leave a comment

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CIVETS:

Colombia Indonesia Vietnam Egypt Turkey and South

Africa

Globalization of the Economy

Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa will take over as the new BRICs, as Brazil, Russia, India and China were dubbed a decade ago.

Last decade, the term BRIC (Brazil, Russia, India and China) was used to refer to emerging markets with high growth potential.

In 2010, six more countries have been included in the rank of these emerging markets, and the group has been designated as CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa). Emerging markets are expected to grow three times faster than developed countries this year and are driving global recovery.

Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa will take over as the new BRICs, as Brazil, Russia, India and China were dubbed a decade ago.

“Each has a very bright future,” HSBC CEO Michael Geoghegan said of the CIVETS, named after the cat-like animals found in some of the countries. “Each has large, young, growing population. Each has a diverse and dynamic economy. And each, in relative terms, is politically stable.”

Geoghegan, whose bank is the biggest in Europe but is targeting emerging markets for growth, said the growing importance of countries also including Mexico, Indonesia and Turkey will continue the power shift away from traditional economic strongholds of Europe and the United States.

Emerging markets will grow three times faster than developed countries this year and are driving global recovery, he said.

“Within three years, for the first time, the economic firepower of emerging markets will overtake the developed world, measured by purchasing power parity. It’s a defining moment.”

The size of the emerging market middle class will swell to 1.2 billion people by 2030, from 250 million in 2000, he said.

That bodes well for financial services, as households tend to open bank accounts and ask for other products when income reaches about $10,000, Geoghegan said.

“Many Chinese households are about to hit this level. They number about 33 million now. But they will quadruple to 155 million by 2014. In India, the change will also be dramatic,” he said.


“Within three years, for the first time, the economic firepower of emerging markets will overtake the developed world, measured by purchasing power parity. It’s a defining moment.”

CIVETS:

Colombia Indonesia Vietnam Egypt Turkey and South

Africa

Globalization of the Economy

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BANK FOR INTERNATIONAL SETTLEMENTS “BIS REVIEW NO. 90”: FINANCIAL SYSTEM

June 29, 2010 at 12:33 pm | Posted in Economics, Financial, Globalization, Research | Leave a comment

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BIS Review

Bank for International Settlements

BIS Review No 90 available

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Tue 6/29/10

Please find BIS Review No 90 attached as an Adobe Acrobat (PDF) file. Alternatively, you can access this BIS Review on the Bank for International Settlements’ website by clicking on http://www.bis.org/review/index.htm.

What’s included?

BIS Review No 90 (29 June 2010)

Kevin Warsh: It’s Greek to me – economic events of the last three years

Gertrude Tumpel-Gugerell: Towards a safer financial system

Petar Goshev: Some lessons from the crisis

Prof Njuguna Ndung’u: Growing real estate through finance

Kiyohiko G Nishimura: Financial regulations – Asian perspectives

Millison K Narh: Monetary policy and outlook for economic growth

e-mail press@bis.org

BIS Review

Bank for International Settlements

BIS Review No 90 available

http://www.bis.org/review/index.htm

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Tue 6/29/10

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GLOBALIZATION OF INTELLIGENCE OPERATIONS BEFORE WORLD WAR I

June 29, 2010 at 8:30 am | Posted in Germany, Globalization, History, India, Islam, Military | Leave a comment

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Globalization of Intelligence Operations:

Germany’s Intelligence Bureau for the East

The Intelligence Bureau for the East (German: Nachrichtenstelle für den Orient) was a German intelligence organisation established on the eve of World War I dedicated to promoting and sustaining subversive and nationalist agitations in the British Indian Empire and the Persian and Egyptian satellite states. Attached to the Auswartiges Amt, it was headed by Archaeologist Baron Max von Oppenheim and, during the war, worked intricately with the deposed Khedive Abbas II of Egypt, and Indian revolutionary organisations including the Berlin Committee, Jugantar, the Ghadar Party, as well as with prominent Muslim socialists including Maulavi Barkatullah. Aside from Oppenheim himself, recruits to the Bureau included Franz von Papen, later briefly the Chancellor of the Weimar Republic, Wilhelm Wassmuss (sometimes referred to as the German Lawrence), Gunther von Wesendonck, Ernst Sekunna and others.

The bureau was intricately involved in almost all the events that ultimately came to be called the Hindu-German Conspiracy, including the Annie Larsen plot, Ghadar Conspiracy, Siam-Burma plan, attempts in Bengal as well as other lesser known plots in the Near east including of the western borders of British India and in Afghanistan.

In addition to its subversive wors against British possessions in India, it also attempted to instigate instability in British possessions in the Muslims in India as well as around the world in the Middle east and in Egypt. It was involved in early Turkish plans for war and the Caliph’s decision to declare Jihad. The bureau was involved in intelligence and subversive missions to Persia and to Afghanistan, and also attempted, along with the Berlin Committee, to recruit Indian soldiers in Mesopotamia. Its Persia operations were led by Wilhelm Wassmuss.[1]

References

1. Popplewell 1995, p. 175-186

· Popplewell, Richard J (1995), Intelligence and Imperial Defence: British Intelligence and the Defence of the Indian Empire 1904-1924., Routledge, ISBN 071464580X, http://www.routledge.com/shopping_cart/products/product_detail.asp?sku=&isbn=071464580X&parent_id=&pc= .

Globalization of Intelligence Operations:

Germany’s Intelligence Bureau for the East

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PAYMENT SYSTEM RISK POLICY: ATLANTA FED

June 29, 2010 at 12:07 am | Posted in Economics, Financial, Research, USA | Leave a comment

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Federal Reserve Board

FRB Atlanta Circular Letter

June 28 2010

AtlantaFed@frbatlanta.org

Mon 6/28/10

Federal Reserve to Implement Changes to Payment System Risk Policy in Early 2011

The Federal Reserve Board on Monday announced that it will implement changes to its Payment System Risk (PSR) policy in early 2011. A specific implementation date will be announced at least 90 days in advance.
http://www.frbatlanta.org/banking/circulars/cl_062810.cfm

Visit our Web site, www.frbatlanta.org

www.frbatlanta.org/rss/

For a list of items recently posted to the Atlanta Fed’s Web site, go to www.frbatlanta.org/highlights.cfm?showHighlights=all

Federal Reserve Board

FRB Atlanta Circular Letter

http://www.frbatlanta.org/banking/circulars/cl_062810.cfm

www.frbatlanta.org/highlights.cfm?showHighlights=all

June 28 2010

AtlantaFed@frbatlanta.org

Mon 6/28/10

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FINANCIAL SECTOR REFORM: BIS

June 28, 2010 at 12:43 pm | Posted in Development, Economics, Eurozone, Financial, Globalization, Research, World-system | Leave a comment

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Bank for International Settlements (BIS)

Fiscal consolidation and financial sector reform are what’s

needed now says BIS

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Mon 6/28/10

At the Annual General Meeting of the Bank for International Settlements (BIS), held today in Basel, Switzerland, Christian Noyer, BIS Chairman and Governor of the Bank of France, said that “over the past two years policymakers worldwide, acting in close cooperation, have succeeded in containing the financial crisis”.

The BIS Chairman continued, “The BIS has provided key support to the international cooperation of central banks and supervisory authorities. The main task of the public sector now is to design policies that minimise the risks of future financial crises and promote sustainable growth. In this regard, international cooperation will continue to be essential, and the progress made by the Financial Stability Board and the Basel Committee on Banking Supervision has been encouraging.”

In its 80th Annual Report, released today, the BIS notes that the steps taken by governments and central banks prevented a financial system meltdown and helped bring to an end the great contraction in global economic activity. The policy tasks that lie ahead, which are no less daunting than they were a year ago, are analysed in the Annual Report.

The BIS General Manager Jaime Caruana underlined three policy challenges:

· “The first and most immediate challenge is to make a convincing start on reducing budget deficits in the advanced economies. Placing public debt on a sustainable path must be accompanied by structural reforms to enhance sustainable growth. At the same time, greater exchange rate flexibility in some emerging market economies could improve the prospects for more balanced global growth.

· “The second challenge is to foster the strengthening of balance sheets and necessary behavioural changes in the financial industry. Official support was intended to facilitate orderly adjustment. But if such support is maintained for too long, it will create moral hazard, undermine private sector financial intermediation and generate new, hidden risks.
· “The third challenge is to finalise international agreements on financial regulation reform. The Basel Committee and the Financial Stability Board are well advanced in the design of concrete reforms. Systemic risk awareness is to be embedded in all aspects of regulation and supervision. In building a broader financial stability framework, we must make sure that macroprudential and macroeconomic policies complement and reinforce each other to limit the build-up of financial vulnerabilities in a pre-emptive way.

“Early effective action to meet these three challenges would strengthen confidence and help put the financial crisis behind us.

“In today’s fragile economic and financial environment, international cooperation is vital for rebuilding confidence. Supporting such cooperation is central to our work at the BIS.”

He welcomed some recently announced policy measures. “Fiscal consolidation in several countries, the plan to publish stress tests for European banks and the support of the G20 for the regulatory reform agenda are all important steps forward,” he said.

Regarding its financial results, the Bank reported a balance sheet total of SDR 258.9 billion ($393.5 billion) at end-March 2010, an increase of SDR 3.5 billion over the past year. The Bank recorded a net profit of SDR 1,859.8 million ($2,887.9 million), compared with SDR 446.1 million ($688.4 million) during the preceding financial year.

Communications,

Bank for International Settlements

E-mail: press@bis.org

Website: www.bis.org

Phone: +41 61 280 8188

Bank for International Settlements (BIS)

Fiscal consolidation and financial sector reform are what’s needed now says

BIS

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Mon 6/28/10

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G20: FINANCIAL STABILITY

June 27, 2010 at 7:46 pm | Posted in Economics, Eurozone, Financial, Globalization, Research, World-system | Leave a comment

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Press release:

Financial Stability Board Chairman reports to G20 Leaders

on Global Financial Reform

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Sun 6/27/10

Financial Stability Board Chairman reports to G20 Leaders on Global Financial Reform

The Financial Stability Board (FSB) Chairman reported to the G20 Leaders today on the progress and remaining challenges in the implementation of the G20 recommendations for strengthening financial stability, including the global effort to reduce the moral hazard posed by systemically important financial institutions.

In conjunction with this, today the FSB is publishing:

A cover letter from the FSB Chairman to the G20 Leaders;

Interim report on reducing the moral hazard caused by systemically important financial institutions; and

Overview of progress in the implementation of the G20 recommendations for strengthening financial stability.

FSB Chairman Mario Draghi’s letter to G20 Leaders noted that “good progress has been made in recent weeks towards new global standards to strengthen bank capital and liquidity, and limit leverage”. He noted that “the quality and amount of capital in the banking system must be significantly higher to improve loss absorbency and resiliency” and that authorities “should provide transition arrangements that enable movement to robust new standards without putting the recovery at risk, rather than allow concerns over the transition to weaken the standards”.

At the Pittsburgh Summit in September 2009, the FSB committed to develop measures to reduce the moral hazard risks posed by systemically important financial institutions (SIFIs), also known as “too big to fail”. The interim report published today sets out six principles to guide the development of an international policy framework to address this problem.

According to these principles, all jurisdictions should:

have in place a policy framework to reduce the moral hazard risks associated with SIFIs;

have effective resolution tools that enable the authorities to resolve financial firms without systemic disruptions and without taxpayer losses;

have the capacity to impose supplementary prudential requirements on firms commensurate with their systemic importance;

have the powers to apply differentiated supervision requirements based on the risks they pose to the financial system; and

put in place or strengthen core financial market infrastructures to reduce contagion risk.

And as the sixth principle,

FSB members will establish an ongoing peer review process to promote effective, consistent and mutually supportive policies to address SIFI risks.

These principles are the basis on which the FSB will develop a set of concrete policy recommendations over the coming months in order to establish the new international framework for addressing the moral hazard problem. The FSB welcomes the G20 Leaders’ endorsement of these principles

This interim paper will be developed into a final report for the Seoul Summit in November.

The FSB also reported on advances made on the other items from the global regulatory reform agenda, including:

improving over-the-counter derivatives markets,

enhancing incentive structures and transparency, and

strengthening adherence to international financial standards.

2010 is a critical year for advancing global reforms in these areas. Policy work is proceeding to agreed, or in some cases accelerated, timelines.

Notes to editors

The reports are available on the FSB’s website, www.financialstabilityboard.org.

The FSB has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies. It brings together national authorities responsible for financial stability in significant international financial centres, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts.

The FSB is chaired by Mario Draghi, Governor of the Bank of Italy. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

For further information on the FSB, visit the FSB website.

The G20 Leaders’ statement at the September 2009 Pittsburgh Summit can be found at http://www.g20.org/Documents/pittsburgh_summit_leaders_statement_250909.pdf.

Press release: Financial Stability Board Chairman reports to G20 Leaders on Global Financial Reform

www.financialstabilityboard.org

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Sun 6/27/10

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LECTURE ON CURRENT CRISIS BY TOMMASO PADOA-SCHIOPPA AT THE BIS

June 27, 2010 at 7:29 am | Posted in Economics, Eurozone, Financial, Globalization, History, Research, World-system | Leave a comment

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The Per Jacobsson lecture for 2010

Per Jacobsson lecture

by Tommaso Padoa-Schioppa released

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Sun 6/27/10

The Per Jacobsson lecture for 2010, by Tommaso Padoa-Schioppa, entitled ” Markets and government before, during and after the 2007-20xx crisis” has just been published on the BIS website at http://www.bis.org/events/agm2010/sp100627.htm.

Mr. Padoa-Schioppa delivered the lecture today at the Bank for International Settlements in Basel, Switzerland.

Communications,

Bank for International Settlements

E-mail: press@bis.org

Website: www.bis.org

Phone: +41 61 280 8188

The Per Jacobsson lecture for 2010

Per Jacobsson lecture by Tommaso Padoa-Schioppa released

http://www.bis.org/events/agm2010/sp100627.htm.

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Sun 6/27/10

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“REBALANCING THE GLOBAL ECONOMY”

June 26, 2010 at 11:47 pm | Posted in Economics, Eurozone, Financial, Globalization, Research, USA, World-system | Leave a comment

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Rebalancing the global economy:

A primer for policymakers

Stijn Claessens Simon J Evenett Bernard Hoekman

23 June 2010

The global balances are a thorn in the side of the G20. This column launches a new eBook with the aim of providing policymakers and their advisers with up-to-date, comprehensive analyses of the central facets of global economic imbalances and to identify and evaluate potential national and systemic responses to this challenge.

We recognise that the process to ensure more balanced global growth must be undertaken in an orderly manner. All G20 members agree to address the respective weaknesses of their economies.

• G20 members with sustained, significant external deficits pledge to undertake policies to support private savings and undertake fiscal consolidation while maintaining open markets and strengthening export sectors.
• G20 members with sustained, significant external surpluses pledge to strengthen domestic sources of growth. According to national circumstances this could include increasing investment, reducing financial markets distortions, boosting productivity in service sectors, improving social safety nets, and lifting constraints on demand growth.

G20 Framework for Strong, Sustainable, and Balanced Growth, G20 Pittsburgh Summit, 24/25 September 2009

Introduction

Such was the concern about the adverse consequences for the world economy of “imbalances” that G20 Leaders, meeting in Pittsburgh in September 2009, adopted a Framework that contained a number of pledges to take action at the national and international level (see text above). This action followed a growing body of expert opinion that took the view that large, persistent current-account imbalances in the major industrialised economies and emerging markets since 2000 had, at the very least, contributed to the global financial crisis witnessed in 2007-8 and to the subsequent Great Recession.

Indeed, second quarter 2010 forecasts from the OECD and IMF suggest that, after contracting during the global economic downturn, worldwide indicators of current-account imbalance are expected to expand through 2012. Global imbalances, it seems, are neither solely crisis-related nor transient. But what are the options for policymakers in the run up to the Canadian G20 meeting and afterwards?

Introducing a new eBook

The purpose of this eBook is to provide policymakers and their advisers with up-to-date, comprehensive analyses of the central facets of global economic imbalances and to identify and evaluate potential national and systemic responses to this challenge. As will become clear, the world economy has experienced substantial current-account surpluses and deficits before, and several of our contributors discuss the contemporary relevance of these episodes. Many contributors focus on important very recent developments, such as the pressures for fiscal retrenchment experienced in Europe during the second quarter of 2010. These developments may well shape how global economic imbalances are tackled in the months and years ahead.

Since expert opinion remains divided on some critical aspects of the rebalancing question, we have not sought to present a single view. Indeed, on some fundamental matters, such as whether imbalances create systemic risks and whether exchange rate movements can remedy imbalances, we have in each case presented at least two leading perspectives, with markedly different policy recommendations. Moreover, given the diversity in national economic circumstances, it would be surprising if a single set of policy prescriptions was valid across the board.

Consequently, then, drawing upon different areas of economic, geopolitical, financial, and historical expertise concerning the international economy, we have assembled cutting-edge analyses of the key questions raised by the challenge of global economic imbalances. Many of our contributors have advanced proposals for reform that could usefully be explored at the national and international level.

The multi-faceted nature of global economic rebalancing

A challenge facing senior officials and analysts is to comprehend the many different dimensions of the rebalancing of the global economy and how they might relate to one another. A first order of business is to define terms. What constitutes an imbalance? How is it measured? Second, causal and normative considerations arise. What factors cause imbalances? Since it is the persistence of these imbalances that is regarded as detrimental to national economies, it is necessary to understand the factors that account for persistent imbalances. Comprehending the different types of harm created by persistent imbalances is a distinct matter, made all the more interesting given claims advanced over the past two years that global economic imbalances contributed to the worldwide financial paralysis and subsequent output collapse in 2008 and 2009, respectively. Ascertaining whether there are systemic costs to global imbalances is a necessary first step in any discussion of potential national, regional, or multilateral responses.

If one is convinced that imbalances are bad for a national economy or systemically, attention then turns to normative prescriptions. While these can and should be informed by conceptual analysis, surely it is helpful to turn to the historical record to examine how previous instances of serious global imbalances have played out. Such evidence plus other considerations can inform an assessment of what public policies must change and whether collective actions are needed. Such an assessment ought to consider the political viability of reform proposals in all of the major affected jurisdictions. Given the constellations of interests often invested around existing sets of national institutions and policies, politically viable reforms may fall far short of the first-best or preferred technocratic option.

Lastly, moving from the national to the systemic level, questions arise as to whether new international rules, conventions or processes are needed to discourage the creation of persistent imbalances in the first place or to correct imbalances when they occur. Such analyses have to take into account the operation of any self-correcting mechanisms at work in the global economy as well as instances where global markets fail to deliver optimal adjustment by leading nations.

The subject matter of this volume

With these considerations in mind, we have organised the contributions to this volume around six questions. Doing so allows authors to focus on different aspects of the global rebalancing challenge, and helps each element of the policy challenge to be appreciated more easily. Of course, decision-makers need to take a comprehensive view of the many facets of global economic imbalances, recognising the connections between the national, regional, and multilateral levels, between the politics and economics of the challenge, as well as drawing from contemporary circumstances and historical experience. The six questions are:

1. How large are contemporary current account imbalances? Why do they persist?

2. What are the systemic costs of imbalances?

3. What are the lessons from previous attempts to rebalance the global economy?

4. What would rebalancing entail? Which policies must change? Is collective action needed?

5. What is the political viability of proposals to rebalance national economies?

6. Are new system-wide accords needed to promote rebalancing or to discourage persistent imbalances?

Implications for policymaking

While the answers to these questions vary and there is no clear consensus, we draw out ten implications for policymaking from the contributions to this book. No doubt, further analysis and deliberation will refine – and possibly contradict – some of the suggested implications. Still, given the high profile attached to global imbalances, it is worth stating them, not least to demonstrate how different facets of the rebalancing challenge relate to one another.

1. Many analysts subscribe to the view that the large current-account imbalances of the past decade were, at least in part, a contributing factor to the recent global financial crisis. Even if imbalances do not represent a threat to the operation of an open global economy, they risk undermining public support for such openness.

2. While imbalances are typically viewed as a macroeconomic phenomenon, their persistence in recent years suggests that there may be underlying structural features of national economies and the international financial system that influence their magnitude.

3. To the extent that such structural features are important causes of national imbalances, the optimal policy mix extends beyond demand management tools. Shifts in expenditure patterns of the magnitude necessary to eliminate some of the current-account imbalances must imply inter-sectoral shifts in resources within economies. This process of reallocation will undoubtedly be affected by supply side measures. And at the international level, governance and other reforms are needed to reduce the incentives of some countries to accumulate foreign exchange reserves beyond what is reasonably needed.

4. Making sure imbalance-related policy reforms are not hijacked by vested interests is vital. Deficit countries, for example, should not succumb to a patchwork of industrial policies dressed up as a national reindustrialisation strategy.1 Neither can large imbalances serve as an excuse to impose capital controls beyond what is prudent from a domestic financial stability perspective.

5. The fact that certain vested interests benefit from the same structural determinants of imbalances strongly suggests that international exhortation, monitoring, and peer pressure processes alone are unlikely to succeed. The limited success of the IMF’s consultation exercise on global imbalances in the middle of the last decade bears out this point.

6. Their limited (in principle, zero) financing needs means there is little automatic external pressure on surplus countries to adjust, besides a fear of a low return on foreign savings. A long-standing asymmetry in the international economy is that the market-driven pressures to adjust fall disproportionately on deficit countries.

7. While there has been much mention of coordinated action to address global imbalances, to date the substantive basis of any inter-governmental deal, its political viability in each leading jurisdiction, and the trigger needed to bring such deliberations to a close remain elusive. Nor have reforms of the international financial system proceeded far enough to remove the incentives on the part of some countries to accumulate official reserves.

8. In the absence of an international accord, policymakers must not succumb to fallacies of composition in assessing national policy options. The allure of deflationary solutions to current-account deficits is far less when major trading partners are all taking similar steps.

9. Other policy imperatives – such as fiscal retrenchment brought about by financial market fears regarding the sovereign solvency – can counteract measures to reduce or limit imbalances. Some surplus countries, such as Germany, are cutting their government budget deficits which, everything else equal, will expand their current-account surplus.

10. Measures to promote private sector investment and to reduce personal and corporate savings will need to complement any fiscal retrenchment in surplus countries. More generally, governments will have to decide how much priority to attach to reducing imbalances compared to other macroeconomic and structural objectives, such as fiscal retrenchment.

Rebalancing the global economy: a primer for policymaking, edited by Sijn Claessens, Simon Evenett and Bernard Hoekman, is available to download here.

References

Francois, J and B Hoekman (2010), “Services Trade and Policy”, Journal of Economic Literature, forthcoming (CEPR Discussion Paper 7616).
Gootiiz, S and A Mattoo (2009), “Services in Doha: What’s on the Table?”, World Bank Policy Research Working Paper 4903.

1 Followers of the rebalancing debate in the UK and the US, two countries with current accounts that are large shares of their national incomes, will recognise the contemporary resonance of this particular example.

Rebalancing the global economy: a primer for policymaking, edited by Sijn Claessens, Simon Evenett and Bernard Hoekman, is available to download here.

http://www.voxeu.org/index.php?q=node/5218

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“ON READING”: MARCEL PROUST

June 26, 2010 at 10:15 pm | Posted in Art, Books, France, Literary, Philosophy | Leave a comment

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On Reading

Marcel Proust (Author)

Damion Searls (Translator)

Eric Karpeles (Foreword)

Editorial Reviews

Product Description

“To understand a profound thought is to have, at the moment one understands it, a profound thought oneself; and this demands some effort, a genuine descent to the heart of oneself . . . Only desire and love give us the strength to make this effort. The only books that we truly absorb are those we read with real appetite, after having worked hard to get them, so great had been our need of them.”

Reading was, for Marcel Proust, more than the pursuit of knowledge: a truly spiritual activity, it was a means of transforming and transcending the self. By reading great authors, he contends, we not only learn of great ideas, but are enriched by the fruits of the world’s most inspirational minds.

About the Author

Novelist Marcel Proust (1871–1922) was a prominent figure in the French salons of the late 19th century, and is best remembered for his huge four-volume masterpiece In Search of Lost Time. Damion Searls won a 2007 NEA grant for his Rilke translations and a 2008 PEN Translation Fund award for his translations of the Dutch writer Nescio. Eric Karpeles is the author of Paintings in Proust.

Product Details:

· Paperback: 112 pages

· Publisher: Hesperus Press

· March 1, 2011

· Language: English

· ISBN-10: 1843916169

· ISBN-13: 978-1843916161

On Reading

Marcel Proust (Author)

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