Salzburg Global Forum on Finance in a Changing World » Overview

The Salzburg Global Forum on Finance in a Changing World is an annual high-level program convened by Salzburg Global Seminar that addresses issues critical to the future of financial markets and global economy in the context of key global trends.

Established in 2011, the Forum offers senior and rising leaders from the financial industry and public sector an opportunity for in-depth, off-the-record conversations on how to build inclusive, open and resilient financial systems and set an agenda for the future.

The Forum’s overarching goal is to facilitate critical analysis of the changing financial landscape and regulatory environment, comparison of practical experience around the world, understanding of technology-driven transformations, and open dialogue on issues of trust and ethics. Each summer, it convenes an internationally representative group of leaders from financial services firms, supervisory and regulatory authorities, consultancies, auditors, law firms and other professional service providers who share a belief that inclusive, efficient and stable financial systems are essential for sustainable growth, shared economic opportunities and prosperity. Going forward, the Forum will continue to explore key developments, strategic shifts and tipping points in global finance, and to help participants learn practical lessons and share international insights.


Andreas Dombret: Financial sector reform – time to slow down or too little, too late?
Andreas Dombret: Financial sector reform – time to slow down or too little, too late?
Andreas Dombret 
Andreas Dombret was speaking at the Salzburg Global Seminar session 'Financial Regulation: Bridging Global Differences'. Ladies and gentlemen, To cut to the chase: International collaboration between regulators has never been so challenging – and yet never has collaboration been so important.   Let me explain. Financial sector reform – time to slow down?
The regulatory community is currently facing enormous pressures. The sovereign debt crisis has given a fresh impetus to calls to water down or delay regulatory reform. Some argue that the ongoing uncertainty in financial markets and the weak global economy are good reasons to ease up on regulatory pressure. They say the financial sector is being asked to do too much too soon, and regulators should slow the speed of adjustment.  Yet I see it as more a case of “too little, too late”: If there is a reproach to be made, it is that regulatory progress has not been faster. The sovereign debt crisis, which is not least driven by systemic problems in some countries’ banking systems, underscores the urgent need to make the financial system more resilient. Relying on financial markets’ self-regulation will not do, I am afraid. We must deliver on our promise and extend regulation and oversight to all systemically important financial institutions, instruments and markets. To deliver this promise, close international collaboration is essential. Given the truly global financial system, “going it alone” is no longer a viable option.  It will only lead to the migration of business and to regulatory arbitrage, undermining not only the integrity, efficiency and orderly functioning of financial markets, but ultimately undermining financial stability. International consistency versus one-size-fits-all
The crisis has clearly demonstrated that countries cannot successfully regulate their financial markets and firms in isolation. Capital flows do not stop at geographical borders; quite a number of financial institutions operate globally. Therefore, an internationally coordinated regulatory response is imperative. To be successful, reforms must be implemented at least at the major financial centers.  International cooperation is not an end in itself, however. Instead, I suggest to measure its value by the extent to which it provides financial stability. While adopting a robust, common set of rules is essential, it is neither practical nor desirable to fine-tune all details of financial regulation internationally. As the characteristics of each country’s financial system differ, sometimes significantly, I do not think it to be appropriate to apply completely identical rules to every country or region. We must strike the right balance between providing a workable level playing field and at the same time providing sufficient flexibility for the peculiarities of national financial systems. The leitmotif for financial regulation ought to be international consistency, not one-size-fits-all.  A uniform set of rules and regulations would deprive us of the benefits of international regulatory competition. By this, I do not mean competition where countries are undercutting each other with ever laxer, but also ever more risky regulation. This would be equivalent to a race to the bottom as we would invite market players to arbitrage across divergent national regimes.  By regulatory competition, I mean assessing the merits of regulatory approaches and measures undertaken by other countries and, if deemed appropriate, adopting these approaches and measures. In short – learning from one another. For instance, in the USA, the Federal Deposit Insurance Corporation, FDIC for short, has gained an extensive wealth of experience in resolving failing financial institutions. In my opinion it would be careless for European authorities not to draw on the knowledge of their US colleagues when implementing their own resolution regimes. Need for international co-operation 
The work to develop a new regulatory framework for the international financial system is slowly but surely nearing completion. An example of what has been achieved through intensive cooperation is the new regulatory standard for bank capital and liquidity, commonly known as “Basel III”, or the comprehensive policy framework for dealing with systemically important financial institutions, SIFIs for short. Yet, we can not at all be satisfied with what has been achieved. While rule-making at the global level is a necessary condition for financial stability, it is by no means a sufficient condition. Rather, for the agreed reforms to be effective, they have to be translated into national laws and regulations. This must be done in a globally consistent manner and according to agreed time-lines. Here, we must significantly step up our efforts and cooperate as closely as possible. Otherwise, we risk failing. Let me illustrate this with three examples.  Solving the too-big-to-fail problem
Solving the too-big-to-fail problem will, without a doubt, constitute the litmus test of financial sector reform. The aim is clear: Taxpayers should not again be stuck with the tab for financial institutions’ failures. To achieve this, we must return to a founding principle of social market economy: individual responsibility. Those who take risks must also face the consequences. The possibility of losses and even default is a constitutive element of any functioning market – and financial markets cannot and must not be an exception to this.  Therefore, we have to find ways of resolving financial institutions, however large, complex, interconnected or internationally active, without causing systemic disruptions. Obviously this demands international co-operation.  National resolution regimes are stretched to their limits when it comes to globally operating SIFIs. To borrow the well-known line from Mervyn King, the Governor of the Bank of England: “Global banking institutions are global in life but national in death”. In the past, if internationally active banks ran into trouble, national supervisors regularly ring-fenced their assets. Banking groups were broken up or rescued as separate entities along national boundaries. This led to systemic distortions and considerable costs to taxpayers.  Against this background, the Financial Stability Board has developed, and the G20 have adopted, a new international standard for resolution regimes, known as the Key Attributes of Effective Resolution Regimes for Financial Institutions.  I very much welcome this development. The Key Attributes represent a major step forward, for the first time stipulating at the global level main features that national resolution regimes should include. Yet, following their adoption by the G20, the Key Attributes must now be implemented consistently across borders. Here, a great deal of work remains to be done. The Key Attributes have to be transposed into legislation which, naturally, has to be much more concrete than the international standard. The necessity of close cooperation is further underscored by the fact that the European Commission has recently published its legislative proposal for an EU framework for bank recovery and resolution. It is of utmost importance to ensure consistency between the two frameworks. Otherwise we risk unnecessary inconsistencies and, consequently, new problems in the event of financial institutions becoming distressed.   Monitoring and regulating the shadow banking system
The so-called shadow banking system can serve as another prime example for the need for close cooperation. Firstly, there is the immediate threat of regulatory arbitrage, as stricter rules imposed on banks via Basel III as well as the rules for SIFIs set incentives for activities and risks to be pushed from the core of the financial system outward to the periphery. Secondly, the fluid, evolutionary nature of the shadow banking system is a reminder to us not to focus solely on risks which have come to light during the current crisis. We have to be flexible enough to capture future developments as well. To ensure this, exchanging information across jurisdictions on a regular basis is crucial. Regarding better monitoring, a lot has already been achieved. The FSB set out recommendations which now have to be implemented by national authorities. Additionally, the FSB has committed to conduct annual global monitoring exercises to assess global trends and risks in the shadow banking system.  Regarding better regulation, work at the international level is ongoing to examine potential gaps and inconsistencies of the existing framework. Several working groups are currently developing proposals on possible regulatory measures. An integrated set of policy recommendations will be presented by the end of this year. These recommendations will then have to be implemented at national level, calling, once again, for close international co-operation to ensure consistency. Enhancing compensation practices 
Reforming compensation practices in the financial sector shall serve as my final example. Asymmetries in remuneration systems in terms of risk and reward led to short-termism and excessive risk-taking. They also contributed to the large, in some cases extreme absolute levels of compensation, leaving firms with less capacity to absorb losses as risks materialized.  Good work should be rewarded with good money. Yet to be good, work has to be sustainable and responsible. To safeguard financial stability, remuneration systems in the financial sector must be better aligned to long-term value creation as well as prudent risk-taking, including through malus or clawback arrangements. The Principles for Sound Compensation Practices and their Implementation Standards developed by the FSB are both helpful and welcomed guidelines to this effect. To address the concerns of firms and improve cross-border supervisory cooperation, the FSB established its Bilateral Complaint Handling Process in early 2012. This mechanism enables national supervisors to bilaterally report, verify and, if necessary, address specific compensation-related complaints by financial institutions that derive from level playing field concerns.  Yet, it will take a lot of stamina and endurance to achieve lasting change in behavior and culture within the financial sector. The organized manipulation of LIBOR is just one cautionary example for this. While progress has been made in implementing the FSB Principles and Standards, more work is necessary to ensure a level playing field in the market for highly skilled employees. Sustained commitment and close cooperation of supervisory authorities therefore remain essential.  Intensified implementation monitoring
The success of financial sector reform crucially depends on the timely and globally consistent implementation of agreed policies. As major reforms to address risks and strengthen regulation across the financial system have been adopted, it is becoming increasingly important to ensure that countries live up to their commitments. By means of peer pressure and transparency, we have to make sure that the measures necessary to improve the stability of the financial system are actually put into practice.  A number of steps to ensure effective and timely implementation of internationally agreed reforms have already been taken. The results of numerous monitoring exercises are summarized by the FSB in regular scoreboards and public progress reports to the G20. In order to enhance the effectiveness of implementation monitoring, the FSB and important standard setting bodies have jointly established a Coordination Framework for Implementation Monitoring. In addition, the FSB monitors the implementation and effectiveness of international financial standards and policies via its peer review program. Peer reviews are an important tool to promote consistency, enabling FSB members to engage in dialogue with peers and share lessons and experiences. It is necessary to continue on this path. Closing remarks
Allow me to summarize: Firstly, ongoing stress in the financial system and a weak economic recovery in many countries is no excuse to weaken our commitment to financial sector reform.  Secondly, today’s interconnected financial markets cannot effectively be regulated nationally. Close international cooperation is warranted. Thirdly, we must strike the right balance between achieving a level playing field and providing sufficient flexibility for the peculiarities of national financial systems. Finally, rigorous implementation monitoring will be indispensable. As the old saying goes: Trust, but verify.
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Financial sector “must be willing to reform deeply and ethically”
Financial sector “must be willing to reform deeply and ethically”
Louise Hallman 
On September 15, 2008, the USA’s fourth largest investment bank, Lehman Brothers filed for bankruptcy. Lehman's bankruptcy filing was the largest in history and its demise was watched in horror in political, financial and economic centers across the globe. Almost exactly five years on, the global financial crisis shows little sign of abating. It is against this backdrop financial market turmoil, which since Lehman’s collapse has worryingly developed into a protracted, full-scale global financial crisis, that government officials, legislators, regulators and supervisors, bankers, lawyers, academics in economics and finance, and financial journalists are coming together in Salzburg, Austria for the Salzburg Global Seminar session ‘Financial Regulation: Bridging Global Differences’ on August 16-19, 2012. “The timing for discussing international co-ordination in financial regulation could not be better,” says SGS faculty member and Deutsche Bundesbank Executive Board member, Andreas Dombret, with fellow faculty members, Edward Greene, senior counsel at leading international law firm Cleary Gottlieb Steen & Hamilton, and Andrea Enria, the chairperson of the European Banking Authority in London agreeing that now is a “crucial” and “delicate moment” for the banking sector. The timely session will consider the greatest challenges facing improved global co-operation and the financial regulation sector as a whole, opening with a keynote speech from the co-chair of the session, Economic Advisor to US President Barack Obama and member of the Trilateral Commission in New York, Paul Volcker. The challenges and issues facing the sector are vast and wide, with new scandals hitting the headlines each week – in the past few months alone, tales of the $2bn JP Morgan loss, the LIBOR rate fixing and this week’s news of Standard Charter Bank’s alleged assistance in Iranian government laundering $250 billion have all hit the newsstands – as well as the ongoing euro-area sovereign debt crisis, which Dombret insists must not “be an excuse for delaying much-needed regulatory reforms.”  “The political window for agreeing to and implementing legally binding international frameworks in the wake of the financial crisis is limited. Now is a crucial time…while there is still impetus for reform and before divergences become further embedded in the evolving architecture of the international financial system,” says Greene. Since the beginnings of financial crisis in 2008, regulatory authorities across the world have undertaken efforts, including the Dodd-Frank legislation in the US, the financial regulation reform package agreed in Europe, and the "Basel III" accord on capital requirements for financial institutions. However, these efforts have not been enough; many issues still remain, including the creep of regulatory arbitrage, transnational divergence and inconsistency in financial reform efforts. These delays in reform and the seemingly never-ending stream of scandals emerging from the banking sector, together with the huge amounts of public money poured into the banks in the early days of the crisis to stop a repeat of Lehman Brothers or another Northern Rock-like bank run, has increased public resentment towards the financial services industry, and subsequently also towards the governments seen to be unquestioningly backing them. “In my opinion,” Dombret states, “solving the ‘too big to fail’ problem will be the litmus test of financial sector reform. The taxpayer should never again be stuck with the tab for financial institutions’ failures…“We must return to a founding principle of social market economy: individual responsibility. Those who take risks must also face the consequences.” David Wright, faculty member and Secretary General of the International Organization of Securities Commissions (IOSCO), based in Madrid, Spain, also acknowledges the importance of the return of responsibility to the banking sector, and supports stronger actions to be taken against those whose behavior is irresponsible. “The financial industry…must stop being in denial and make major changes to its long term behavior,” says Wright, who will feature on the panel discussing the role of the 2009-established Financial Stability Board and its potential as a focal point for global co-ordination. “They must accept that given what has happened much stronger regulatory and supervisory oversight is required of this industry; much tougher sanctions, including more frequent use of jail for miscreants; much greater levels of transparency at all levels; and radical change in boardrooms to ensure boards and management are competent, responsible and mandated to follow best corporate governance practice. “Responsible leaders in the financial industry must step up to the plate and fully support global regulators introducing these necessary reforms.  “Unfortunately,” Wright adds, “there have been few examples recently.” “Banks often claim that the reform will adversely impact lending to the real economy, hampering the recovery and the exit from the crisis,” says Enria. “But delaying the action for regulatory repair is not the right answer, as only stronger and safer banks will be able to support the real economy.” “No one should underestimate the importance of this task,” says Wright, “The cost so far of this crisis being estimated at around 10-15% of global GDP with most of the costs of this damage falling on blameless, decent, ordinary people… “The financial sector as a whole bears the largest responsibility for the severe damage caused by this crisis. It must be willing to reform, and reform deeply and ethically.” But if there is such need to reform and much consensus around this need, why have efforts to secure this reform thus far fallen short? One key issue is national divergence; despite the high-level international attempts to solve the crisis, individual countries have not implemented a consistent approach to the much-needed reforms. “[I]t is important to ensure a global level playing field in financial market regulation. Countries must not be allowed to create competitive advantages for market participants or financial centres domiciled in their jurisdictions at the expense of others by implementing internationally agreed reforms only half-heartedly or belatedly... [I]mplementation will have to be monitored rigorously by international bodies,” says Dombret, who will be leading the session’s discussions on the international co-ordination needed to achieve this regulatory reform alongside co-chair Jacques de Larosière, Chair of the High-Level Group on EU Financial Supervision and Senior Advisor for BNP Paribas in Paris. With the goal of bridging the global divides that exist, the Salzburg Global Seminar session will look to address the great divergence in regional and national approaches, comparing the European Union with the USA, and looking to how other regions, such as Asia, are also responding to the recommendations on financial regulation as made by the G-20, the group of the world’s 19 largest economies plus the European Union, which has been meeting to discuss the global financial crisis since 2008. The session will also see working groups consider what a treaty-based multilateral supervisory framework might possibly look like. Other key issues to be covered will also cover how mutual recognition and formal international agreements might help achieve the goals of the G-20, and what stumbling blocks remain in the adoption of international accounting standards as called for by the G-20. As well as the planned questions to be discussed, there will no doubt be many more. “Are we sure we are focused on all the essential elements of global financial reform?” asks Wright ahead of the three-day seminar. “Are we sure that the sum of the interconnected policy reforms will enhance sustainable long-term economic growth? Will they be all implemented at the global level? Is the present constellation of global regulatory financial bodies sufficient? Or are further integrationist steps required? If so, which?” All these questions and more will be raised over the three days at Schloss Leopoldskron, and whilst many may remain unanswered and unresolved, the faculty remain hopeful that much will be achieved. “I hope the discussion during this session will allow identifying the key steps that still need to be taken to enhance international consistency,” says Enria.  Greene adds, “I hope that the insights and lasting relationships developed through the conference will lead to the formation of innovative regulatory reform proposals and promote greater cross-border cooperation and coordination going forward.” Doubtless, there will be much road on which to go forward in the journey of lasting and effective financial reform.
Salzburg Global Seminar session ‘Financial Regulation: Bridging Global Differences’ runs August 16-19, 2012. Lecture materials and audio recordings of on-the-record discussions will be made available after the conclusion of the seminar.
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The Financial Crisis: Regrettably Far From Over
The Financial Crisis: Regrettably Far From Over
Louise Hallman 
Ahead of the Salzburg Global Seminar session on ‘Financial Regulation: Bridging Global Differences’, four members of the faculty – Andreas Dombret, Member of the Executive Board, Deutsche Bundesbank, Frankfurt am Main; Andrea Enria, Chairperson, European Banking Authority, London; Edward Greene, Senior Counsel, Cleary Gottlieb Steen & Hamilton, New York; and David Wright, Secretary General, International Organization of Securities Commissions IOSCO, Madrid – answered three key questions posed by SGS editor, Louise Hallman. Why is it important for this session to be held now? Andreas Dombret: The timing for discussing international coordination in financial regulation could not be better. Work on developing a new regulatory framework for the international financial system is slowly but surely nearing completion; the cornerstones of financial sector reform are in place. Yet we still have a long way to go to make the G20 commitments work back home. Success is not guaranteed. Ultimately, it is the globally consistent implementation of the agreed policy measures into national laws and regulations that will count. We must address the issue of regulatory arbitrage now, by ensuring global cooperation and by shifting our focus from policy development to implementation monitoring. Andrea Enria: The Salzburg Global Seminar is taking place in a delicate moment for the financial sector in general and for the banking sector in particular. We are currently in the middle of a major reform that will deeply change the regulatory standards for banks and significantly affect their business models. Banks often claim that the reform will adversely impact lending to the real economy, hampering the recovery and the exit from the crisis. But delaying the action for regulatory repair is not the right answer, as only stronger and safer banks will be able to support the real economy. Edward Greene: The financial crisis of 2008 demonstrated the need for international cooperation to address the challenges facing multinational institutions and interconnected financial markets. Recognizing that global problems in the financial system required a global response, regulators from around the world convened in the aftermath of the crisis to discuss reform on an international basis. However, despite early promises of commitment to transnational reform efforts, impediments to such coordination remain. Overreliance on soft-law principles and national implementation has allowed for transnational regulatory divergence, which, in turn, increases risk of arbitrage and raises concerns over our ability to successfully prevent and respond to financial crises going forward. The political window for agreeing to and implementing legally binding international frameworks in the wake of the financial crisis is limited. Now is a crucial time to oppose this trend, while there is still impetus for reform and before divergences become further embedded in the evolving architecture of the international financial system. David Wright: This financial crisis, which began exactly five years ago, is regrettably far from over. The process of global financial repair is also “mi-chemin”. Much has been achieved but much is still on the drawing board. It is essential that the global regulators complete the job – and that afterwards nation states and regional organizations, such as the European Union, implement the global principles and standards agreed consistently avoiding regulatory arbitrage and gaps. Before the end of this year 3 crucial pieces of the global regulatory repair agenda must be moved forward – namely the implementation of the failing firm resolution framework, the determination of the elements of shadow banking policy and the over the counter derivatives regime. Furthermore a quantum leap in cross border cooperation is needed among global financial regulators for these reforms to be successful. IOSCO has an important part to play in all these policy domains. So this conference comes at a really important time – as the global financial regulators inch forward to complete their work to make the financial system safer, sounder and sustainable. To ensure that in the future the financial sector works for the development of the economy, not the other way round. No one should underestimate the importance of this task – the cost so far of this crisis being estimated at around 10-15% of global GDP with most of the costs of this damage falling on blameless, decent, ordinary people. What do you see as being the key challenge facing the financial regulation sector? AD: In my opinion, solving the “too big to fail” problem will be the litmus test of financial sector reform. The taxpayer should never again be stuck with the tab for financial institutions’ failures. To achieve this, we must return to a founding principal of the social market economy: individual responsibility. Those who take risks must also face the consequences. The possibility of losses and even default is a constitutive element of any functioning market – and financial markets must not be an exception to this. Therefore, we have to find ways of resolving large and complex financial institutions without causing systemic disruptions. Progress in this regard has already been made, both at the international and national level. Nevertheless, much work remains to be done. AE: This process is taking place in a challenging context. Following the financial crisis, we are witnessing a retrenchment of banks to national borders with all the negative impacts it can have in terms of funding and growth.  Even in Europe, the sovereign debt crisis is having an important impact on the European Single Market and the segmentation in the money market is significantly hindering the functioning of the single monetary policy in the euro area. The reform provides an opportunity to move to a truly uniform regulatory environment and to centralized supervision. This will be particularly challenging, as we move from very different national approaches to supervision. EG: The key challenge facing the financial regulation sector is that of transnational divergence, or inconsistent financial regulatory reform efforts across different jurisdictions. Such conflicting regimes may lead to regulatory arbitrage, or movement of activity to less regulated or more favorably regulated markets, thereby undermining financial reform efforts. Fragmentation of institutions and markets may also occur if entities attempt to shield certain businesses from others in order to avoid local regulation, resulting in the decreased safety and liquidity of markets and entities. Overlapping regulatory and compliance regimes may also increase financing costs for the economy. In particular, the resolution of multinational financial institutions is one area of regulation with critical international implications, and in which convergence is essential. Without greater coordination in cross-border insolvencies of systemically important financial institutions, regulators of markets in which large institutions operate will be tempted to require operations to be conducted through subsidiaries, ring-fence assets in those domestic subsidiaries, impose liquidity requirements to protect domestic creditors and avoid the transfer of assets prior to insolvency. DW: The financial sector as a whole bears the largest responsibility for the severe damage caused by this crisis. It must be willing to reform, and reform deeply and ethically. The latest LIBOR debacle, insider trading incidents and numerous recent miss-selling practices indicate that damaging financial scandals seem to be occurring more and more frequently. The financial industry therefore must stop being in denial and make major changes to its long-term behavior. The best firms will. They must accept that given what has happened much stronger regulatory and supervisory oversight is required of this industry; much tougher sanctions, including more frequent use of jail for miscreants; much greater levels of transparency at all levels; and radical change in boardrooms to ensure boards and management are competent, responsible and mandated to follow best corporate governance practice. Responsible leaders in the financial industry must step up to the plate and fully support global regulators introducing these necessary reforms. Unfortunately there have been few examples recently. What do you hope to see as the outcome of this session in the immediate and longer-term future? AD: I hope that we will take away two things from our discussion. First, the euro-area sovereign debt crisis must not be an excuse for delaying much-needed regulatory reforms. Quite the opposite – the current challenges underscore the urgent need to make the financial system more resilient. Second, it is important to ensure a global level playing field in financial market regulation. Countries must not be allowed to create competitive advantages for market participants or financial centers domiciled in their jurisdictions at the expense of others by implementing internationally agreed reforms only half-heartedly or belatedly. For this to happen, implementation will have to be monitored rigorously by international bodies. AE: Greater integration in financial markets requires strong institutional underpinnings, limiting regulatory divergence and the recourse to lighter rules and supervisory practices to attract business in the national financial centers. A lot is being done, but international standard setting bodies need to be endowed with stronger tools and governance mechanisms. I hope the discussion during this session will allow identifying the key steps that still need to be taken to enhance international consistency. EG: Conference attendees represent a unique mixture of policymakers, academics, and practitioners who will have a role in assisting in the supervision of financial markets and advising rule-making bodies on regulatory reform initiatives. In the short-term, these participants can promote awareness of the importance of cross-border cooperation in their jurisdictions. Greater understanding of the costs of piecemeal national regimes can, in turn, help overcome widespread reluctance to engage in more formal and informal arrangements to create a more consistent global financial regulatory system. I hope that the insights and lasting relationships developed through the conference will lead to the formation of innovative regulatory reform proposals and promote greater cross-border cooperation and coordination going forward. DW: Those involved in this highly complex process of financial regulatory reform have no monopoly of wisdom. Sharing experience, ideas and theories among people from many different backgrounds is always a force for good especially if led by Paul Volcker and Jacques de Larosière, two great global financial regulatory leaders. Two series of questions are of particular importance it seems to me:
(i) Are we sure we are focused on all the essential elements of global financial reform? Are we sure that the sum of the interconnected policy reforms will enhance sustainable long-term economic growth? Will they be all implemented at the global level?
(ii) Is the present constellation of global regulatory financial bodies sufficient? Or are further integrationist steps required? If so, which?
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Timely talks on deadlocked Doha Round
Timely talks on deadlocked Doha Round
Louise Hallman 
If the Uruguay Round of trade talks, held by GATT, the predecessor to the WTO, had seemed slow in reaching its conclusion at seven and a half years – twice its original schedule – then the current Doha Round must be glacial, with the Ice Age possibly returning and freezing progress altogether. Set up to try to “improve the trading prospects of developing countries”, the talks were first started over eleven years ago in November 2001, covering over 20 areas of trade policy, including the main sticking point of agricultural subsidies. But in July 2008, the protracted Doha Development Agenda yet again ground to a halt. Four years on since the last round of talks in Geneva, despite numerous attempts from some politicians and trade officials in both developing and developed nations, and the seemingly unending optimism of WTO Director-General, Pascal Lamy – who declared he expected a return to the negotiating table as recently as the beginning of May 2012 – the talks have still not yet resumed, much less resolved the issues that caused the initial stalling and collapse. It is against this frustrating deadlock that over 30 international trade experts from almost 20 countries gather this week in Salzburg, Austria at the Salzburg Global Seminar to discuss the future of the multilateral trading system and the WTO. Over the coming three days, the participants will tackle a number of issues, not only how to resume talks and overcome the stumbling blocks to the Doha Round, but also how can the WTO ensure that its functions that have proven to work well – such as dispute settlement – can continue even if the Doha Round completely fails, and is it possible to pursue and launch negotiations on other issues, such as investment and other Singapore issues, without having concluded the Doha Round? Looking at the particular stumbling block of lack of political will – an issue he blamed also for the stalling of the Uruguay Round, over the end of which he presided – Peter Sutherland, former Director-General of the GATT and WTO, and current chairman of Goldman Sachs International, will give a keynote speech on Monday afternoon; Generating Political Support and Leadership will open the two and half day session. Current Deputy Director-General to the WTO, Rufus Yerxa will also speak in the session, on the topic The Way Forward: Revival? Reform? Retreat? Representatives from the permanent missions to the WTO from the EU and Mexico, Angelos Pangratis and Maria Cristina Hernández-Zermeña, will offer their insights into alternative strategies, looking at the regional, bilateral, plurilateral and sectoral agreements being sought by countries as a means to avoid the Doha deadlock. What will these additional trade agreements mean for the WTO? If the ‘spaghetti bowl’ of trade agreements continues to grow, will it later require rationalization? And will this need for rationalization prompt a renewed commitment to work at the multilateral level? Other issues to be addressed in the session will include the relationship between trade, aid and developing countries, trans-Atlantic trade relations, the impact of shifts in the global economy on multilateral trade relations, prospects for trade facilitation, investment and competition rules, and what businesses want out of trade negotiations and the WTO. With WTO Director-General Pascal Lamy reporting to the WTO General Council on May 1, 2012 that on the Doha Round, “my conversations over the past few weeks with Ministers and delegations have provided me with a sense that Members wish to continue to explore any opportunities to gain the necessary traction and make tangible progress soon,” the Salzburg Global Seminar session couldn’t prove more timely. The session will start at 3pm on Monday, May 21, 2012 and conclude in the afternoon Wednesday, May 23. Key comments will be tweeted from the session by @salzburgglobal on the hashtag #SGStrade.
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