Dubai School of Government Lecture Outlines Inadequacy of International Financial System

Former Governor of Bank of Canada Calls for International Framework Governing Financial System and Exchange Rate Mechanism

Dubai-UAE: 11 January, 2011 – Policy makers, financial regulators and central bankers need to establish an internationally agreed framework of rules governing the financial system and the exchange rate mechanism in order to help governments bring a semblance of sanity to the global economic landscape, according to Dr. David A. Dodge, former Bank of Canada Governor, member of the International Advisory Council for the UAE Central Bank and senior advisor at the Canadian law firm Bennett Jones.

Dr. Dodge’s comments came as part of the lecture held on 10 January by the Dubai School of Government, a research and teaching institution that focuses on public policy in the Arab world. Titled ‘Building an International Financial System for the 21^st Century’, the talk outlined the inadequacy of current international financial arrangements and highlighted the salient components that should comprise a revamped system.

According to Dr. Dodge, while international financial and monetary arrangements have been extensively debated, for many developed and emerging economies the global financial crisis has shown an intimate link between internal and international financial stability. The focus right now is on balancing the global economy, which according to common perception would be difficult to accomplish under the current circumstances.

Dr. Dodge said: “While the costs and the economic implications of the global economic crisis are not completely clear, we cannot gauge the severity if measured against the billions of dollars lost in the markets or the millions of jobs that have vanished as a result of redundancies and shattered personal finances. We do know how much we need a comprehensive reform that addresses major institutional markets, regulatory policies and infrastructure vulnerabilities that have been laid bare.”

While driving the need for a revamped financial system and a unified framework, Dr. Dodge described the stumbling blocks that are likely to make the process of agreeing on a new financial structure difficult.

He added: “The monetary and financial world is becoming increasingly multipolar, with three large currency blocs and other emerging ones that will have to be accounted for in any new framework. Apart from that, the diverse nature of the participants and disparate linkages between economies could prove to be too cumbersome to resolve.”

Reemphasizing the need for economic consistency, Dr. Dodge said that any future financial architecture will have to embrace all aspects of monetary interrelationships among different nations.

Dr. Tarik Yousef, Dean of the Dubai School of Government, said: “As compelling as the case for such a framework is, the challenge of crafting a workable solution lies in advancing goals that are common to both financial stability and market discipline. While these goals are usually complementary, they can also be competing, especially in times of high financial stress.”

Established in 2005 in cooperation with the Harvard Kennedy School, the Dubai School of Government is dedicated to the promotion of good governance through enhancement of the region’s capacity for public policy. The School collaborates with regional and global institutions in delivering its research and training programmes, and organises policy forums and international conferences to promote critical debate on public policy in the Arab world.

For more details, visit www.dsg.ae or call +9714 329 3290.

About Dubai School of Government
Established in 2005 in cooperation with the Harvard Kennedy School, the Dubai School of Government is committed to the creation of knowledge and the dissemination of global best practices in the Arab world. The institution conducts various programmes that seek to enhance the region’s capacity for effective public policies.

About Bennett Jones
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