Asia Chairman Gives Prestigious del Pino Lecture on 'Post-Crisis Policy Imperatives'
July 06, 2009
Stephen Roach
"A break from the broken policies and macro strategies of the past is an urgent imperative," urges Asia Chairman Stephen Roach in "Leadership Imperatives for a Post-Crisis World." The piece was the basis for a lecture Roach gave at the Rafael del Pino Foundation on June 22 in Madrid - a prestigious platform previously reserved for Nobel prize winners, senior policy makers and heads of state.
Looking ahead, Roach sees the macro environment over the next several years as likely to be characterized by a "persistent fragility, punctuated by periodic setbacks."
Roach argues that politicians and policy makers must go beyond recent proposals for micro regulatory reform and revamp the macro framework that led to a "lethal interplay between asset bubbles and global imbalances." He calls for a rethinking of the central banking function as a critical element of the post-crisis policy architecture.
As such, Roach says he concurs with recent proposals that monetary authorities be empowered as "systemic risk regulators," but with the added stipulation that "with that new power must come greater accountability in the form of a new financial stability mandate."
Roach closes by exploring several other policy options and asking what he terms the biggest question of all: "Does the body politic have the vision and the courage to look beyond the short term and make tough choices that could provide a lasting cure for a crisis-torn world?"
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