The 46th Conference of the Governors’ of The South East Asian Central Banks (SEACEN) Research and Training Centre, High Level Seminar and 30th Meeting of the SEACEN Board of Governors were held from 25-26 February 2011 in Colombo, Sri Lanka. Participating at the Conference and the Board of Governors’ Meeting included Haji Mohd Rosli Haji Sabtu, Managing Director Autoriti Monetari Brunei Darussalam; Dr. Chea Chanto, Governor National Bank of Cambodia;
Dr. Zhou Xiaochuan, Governor People’s Bank of China; Dr. Choongsoo Kim Governor The Bank of Korea; Dr. Zeti Akhtar Aziz, Governor Bank Negara Malaysia; Dr. Yuba Raj Khatiwada, Governor Nepal Rastra Bank; Loi Martin Bakani, Governor Bank of Papua New Guinea; Heng Swee Keat, Managing Director Monetary Authority of Singapore; Ajith Nivard Cabraal, Governor Central Bank of Sri Lanka; Fai-Nan Perng, Governor Central Bank, Chinese Taipei; Dr. Prasarn Trairatvorakul, Governor Bank of Thailand; Dr. Nguyen Van Giau, Governor State Bank of Vietnam and Dr. Muliaman Dharmansyah Hadad, Deputy Governor Bank Indonesia; Maung Maung Win, Deputy Governor Central Bank of Myanmar; Diwa C. Guinigundo, Deputy Governor Bangko Sentral ng Pilipinas from SEACEN member central banks. 1 His Excellency Mahinda Rajapaksa, President of Sri Lanka, officiated at the opening ceremony.
The keynote speaker at the Conference was Naoyuki Shinohara, Deputy Managing Director of the International Monetary Fund. The other speakers included Jaime Caruana, General Manager of the Bank for International Settlements, Dr. Duangmanee Vongpradhip, Executive Director-South East Asia Voting Group of the International Monetary Fund, Professor Charles Goodhart from the London School of Economics, Dr. Y.V. Reddy, former Governor of the Reserve Bank of India and Professor Emeritus of the University of Hyderabad and Dr. Gavin Bingham, Secretary General of the Central Bank Governance Forum of the Bank for International Settlements. Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka chaired the Conference and Meeting. The theme of the Conference was “Post Global Financial Crisis: Issues and Challenges for Central Banks of Emerging Markets”.
In his inaugural address, President of Sri Lanka Mahinda Rajapaksa, welcomed The People’s Bank of China as new member of SEACEN. He stressed that the Conference theme was appropriate given the extensive and far reaching impact of the recent global financial crisis. He also stated that the resilience of Asian countries was a testament to the effectiveness of the measures that were taken after the Asian crisis to strengthen these economies, and emphasised the need for maintaining sound macroeconomic fundamentals and a strong financial system to withstand future crises. The President cautioned that although the worst of the crisis was behind us, this period of relative ‘calm’ should be used to strengthen the world economic and financial framework, and reminded central bankers and multi-lateral agencies of the enormous responsibility placed on them to maintain global economic and financial stability in order to uplift living standards, especially highlighting the vital role of the SEACEN members in rebuilding the world economy and reforming the international monetary system.
In his welcome address Governor Ajith Nivard Cabraal stated that the Conference was a highlight of the 60th Anniversary celebrations of the Central Bank of Sri Lanka. He noted that since the speed at which global economic and financial developments affected the rest of the world was much faster than before, today’s central bankers are facing greater challenges. He therefore welcomed the opportunity to share experiences and strengthen collaboration among Governors.
Nayouki Shinohara in his keynote address noted that the multi speed global recovery is being led by Asia. However, he noted that there were downside risks to the recovery in advanced economies due to fiscal vulnerabilities and the upward price pressures faced by emerging markets from rising commodity prices.
The Governors noted the challenges facing emerging markets during the post-global financial crisis from the perspective of SEACEN central banks. These include the exit strategies to phase out the macroeconomic stimulus packages implemented during the recent crisis. They observed that any transition strategy must be compatible with the emerging domestic and international environment and should be well coordinated and appropriately sequenced. In addition, Governors stressed the need for strong leadership and decisive action, particularly in periods of crisis.
The Governors recognised that price stability could no longer be the single focus of central banks and emphasised a greater role for central banks in fostering financial stability due to the increasing linkages between the macroeconomic environment and the financial sector. They emphasised the need for sound macroeconomic policies, complemented by macro-prudential measures to ensure a strong economic and financial system.
They also discussed the vulnerability from large and volatile capital flows and its implications for monetary and exchange rate policies and emphasised that the effectiveness of the policy choice depended on the nature of capital flows. They further discussed the need for a more robust surveillance system and greater cross border cooperation to monitor capital flows and emphasised the need for a more developed financial system to mediate these capital flows and a more liberalised environment to encourage outward investment. They also discussed the need to pay more attention to the volatility in the exchange rate caused by capital flows, as it had an adverse impact on small open economies.
They highlighted that SEACEN’s unique position as the most inclusive regional forum for central banks with a wide network base provided platforms to promote excellence in learning in central banking and to foster collaboration among member banks. The Centre’s learning solutions in core central banking knowledge areas, namely Macroeconomic and Monetary Policy Management, Financial Stability and Supervision, Payment and Settlement Systems and Leadership and Governance, are highly contextualised to build central banking capabilities in the region. To further elevate the Centre, the Governors endorsed SEACEN’s vision: “To be the Regional Learning Hub for Central Banks in the Asia-Pacific Region”.
The Governors accepted with thanks the offer of The Bank of Korea to host the 47th Conference of SEACEN Governors and 31stMeeting of the SEACEN Board of Governors in 2012 and expressed their gratitude to President of Sri Lanka Mahinda Rajapaksa, for his presence at the Opening Ceremony. They further expressed their appreciation to the Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal and his staff for the excellent arrangements and warm hospitality in hosting this year’s SEACEN Governors’ Conference, High Level Seminar and SEACEN Board of Governors’ Meeting. The Governors congratulated the Central Bank of Sri Lanka on its 60th Anniversary.
The 17 SEACEN members comprise the Autoriti Monetari Brunei Darussalam; National Bank of Cambodia; People’s Bank of China; Reserve Bank of Fiji; Bank Indonesia; The Bank of Korea; Bank Negara Malaysia; The Bank of Mongolia; Central Bank of Myanmar; Nepal Rastra Bank; Bank of Papua New Guinea; Bangko Sentral ng Pilipinas; Monetary Authority of Singapore; Central Bank of Sri Lanka; Central Bank, Chinese Taipei; Bank of Thailand and State Bank of Vietnam. The participating observer bank is the Bank of Lao PDR.