opening remarks of mr. javier guzman · pdf file · 2013-10-17microsoft word -...
TRANSCRIPT
OPENING REMARKS OF MR. JAVIER GUZMAN CALAFELL, DIRECTOR GENERAL OF THE CENTER FOR LATIN AMERICAN MONETARY STUDIES, AT THE BANK OF JAPAN-CEMLA SEMINAR ON REGIONAL FINANCIAL COOPERATION, TOKYO, JAPAN, OCTOBER 11, 2012.
Good Morning,
First of all I would like to thank the Bank of Japan, and very specially Mr.
Kiyohiko Nishimura, for giving CEMLA the opportunity to co-organize this
event.
Let me note as a background that CEMLA, the Center for Latin American
Monetary Studies, is the association of central banks from Latin America
and de Caribbean, although our membership of 53 institutions includes
most of the central banks from advanced economies, as well as other
financial organizations.
This Seminar represents another step in the efforts to get a closer
collaboration among central banks in Asia, Latin America and the
Caribbean, that with the support of CEMLA began several years ago. In
fact, the governors of the central banks of these regions have been meeting
annually since 2006, to exchange views and to learn from each other, as
well as to foster closer contacts and mutual understanding.
The positive experience with these meetings has led to the search for
means to enhance even further cooperation among the central banks of the
two regions. In this context, in 2010 governors decided to promote a
number of initiatives that include the joint organization of events, the
creation of new communication channels, the preparation of joint studies,
and internship and technical assistance programs, among other measures.
CEMLA has been working closely with SEACEN and several Asian central
banks to implement these proposals.
The topic that will be discussed today is of particular relevance for CEMLA,
since the main objective of the Center is precisely to foster cooperation
among central banks in Latin America and the Caribbean, through a better
understanding of monetary and financial issues in the region. But beyond
this, discussion of this topic is in my view crucial in the current juncture.
Why is this the case?
To start with, the relevance of regional cooperation has increased as a
result of globalization. Financial and economic globalization have resulted in
numerous benefits for the world economy, but at the same time have been
accompanied by new challenges. In particular, the transmission of shocks
from one economy to another has become faster and far more pronounced.
This has accentuated the vulnerability of individual economies to external
factors, and the need for cooperative responses at the regional level.
Regional financial cooperation has received an additional boost from at
least three more forces: the increasing integration of trade and financial
flows in some regions; the geographical nature of economic contagion; and
a sense of unease with the capacity of global financial institutions to
guarantee regions´ prosperity, and with the reliability of international
institutions in which emerging market and developing economies feel to
have insufficient influence.
Furthermore, regional financial cooperation is also important for political
reasons. It can be key to defend regional interests in international
institutions and to enhance these countries´ status in the international
community. Also, it gives their members an opportunity to alternate or
resolve their political differences.
Of course, the creation of efficient mechanisms for regional financial
cooperation faces numerous challenges. Let me refer briefly to three of
them. First, regional economies are diverse and heterogeneous in terms of
per capita incomes, stage of economic development, institutional capacity,
and economic systems and structures. Such diversity and heterogeneity
create obvious difficulties for financial cooperation. Second, experience
shows that a strong political will is essential for regional financial
cooperation to succeed. Indeed, consensus on a common long term goal
among member countries will strengthen the driving force to achieve that
goal. Third, the success of regional financial cooperation will require a
supportive institutional structure. Even with a strong political push for
cooperation, this might imply financial resources and expertise beyond the
capacity of many emerging market and developing economies.
The experiences of Asia, Latin America and the Caribbean provide us with
outstanding lessons on the relevance of and challenges related to regional
financial cooperation. On the one hand, Latin America and the Caribbean
have the longest history of regional integration efforts in the developing
world. These integration processes were also the context in which different
forms of regional financial cooperation were born. On the other hand,
although more recent, the efforts of financial cooperation in Asia have
shown an impressive progress after the 1997-98 crisis, with a field of action
that encompasses a financial safety net, macroeconomic surveillance and
capacity building.
To discuss a number of issues related to regional financial cooperation and
the experiences of Asia and Latin America, we have assembled today a
very diverse, talented and experienced panel of experts. We will thus have
the privilege to listen to the points of view of three distinguished central
bankers from these regions, a high level official of one of the most important
global financial institutions, and the director general of one of the key
components of the institutional structure for financial cooperation in Asia.