Avoiding Debt Tsunamis and Building Fintech Futures: New Economic Systems in a Post-Pandemic World

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May 11, 2021
by Aaisha Dadi Patel
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Avoiding Debt Tsunamis and Building Fintech Futures: New Economic Systems in a Post-Pandemic World

Salzburg Global Finance Forum discussions highlight lessons to take into consideration on post-pandemic economic systems  Speakers emphasized that sustainable growth remains critical to thinking of the way forward for economic systems (Image credit: Tech in Asia)

Fragmented systems, cryptocurrencies, and the importance of sustainable growth formed central points of conversation in the first two of a three-part series of online discussions hosted by the Salzburg Global Finance Forum in 2021.

As the Salzburg Global Finance Forum in 2021 marks a decade since its establishment, it has convened the series Post-Pandemic Leadership for Financial Services — in partnership with BBVA, Google Cloud, and JPMorgan Chase & Co., and sponsored by the European Banking Federation and Sherman & Sterling — to provide context to the annual two-day program set to be held in June, which will examine the geopolitical and market issues that confront the financial services industry. 

“This gathering offers us the chance to examine best thinking on systematic risk and strategic responses,” said President and CEO of Salzburg Global Seminar, Stephen L. Salyer, as the series kicked off on April 7 with Post-Pandemic Leadership for Financial Services: How Can We Prevent the Debt-Buildup from Causing the Next Crisis?

Featuring speakers including acting head of the OECD’s Financial Markets Division, Rob Patalano, distinguished fellow at the Asia Global Institute; Andrew Sheng, professor at FGV Escola Brasileira de Economia e Finanças; Sergio Werlang, a non-resident fellow at Brugel; Thomas Wieser, and chief US economist and managing director at Morgan Stanley; Ellen Zentner; the discussion was moderated by Dominik Treeck, partner, Public Sector & Policy Practice at Oliver Wyman.

With the economic impact of the pandemic being felt far and wide, the discussion provided insight into what lessons can be drawn, and the optimistic suggestion that this is not the financial crisis that was feared, with the world economy at present in a far better position than it was a decade ago. 

That said, speakers agreed that there is no one-size-fits-all solution, with some economies — especially those in emerging markets — facing combinations of challenges. Structural issues underpin a large extent of issues that the pandemic only compounded, building on historical debt that was high to begin with, and in many economies, central banks are sitting at the end of their accommodative ropes. 

While recovery is happening at a faster pace than expected in some economies, speakers emphasized that sustainable growth remains critical to the way forward. 

Moderated by Greg Medcraft, director of the OECD Directorate for Financial and Enterprise Affairs and member of Salzburg Global Seminar Board of Directors, the conversation on April 27 centered on Post-Pandemic Leadership for Financial Services: What New Policies Are Needed to Govern the Intersection of Finance and Tech? “Perhaps more than any preceding economic crisis, this one has spawned an accelerated use of technology across the economy generally and in the financial industry specifically,” Salyer said in his opening remarks. 

Panelists included Ed Bowles, global director for public policy at F2 (Facebook Financial), Facebook; Chris Brummer, professor of law and faculty director at Georgetown University's Institute of International Economic Law; Loretta Joseph, fintech advisor at the Financial Services Commission of Mauritius; and Sopnendu Mohanty, chief fintech officer at the Monetary Authority of Singapore (MAS). 

The dynamic discussion emphasized the rate at which technology is fast changing the way financial systems work across the world, with an explosion of digital services. This rapid expansion transverses the globe, with creative approaches to already-existing technologies taking center stage in the establishment of new systems. 

Panelists spoke about the importance of stimulating competition in the industry as well as interrogating regulatory systems, and discussed how in different regions of the world, drives for new solutions are underpinned by a common goal: that they fulfill a need for public good. 

Overarchingly, panelists agreed that a collaborative approach needs to be taken to build the next world as we know it. On June 1, the final conversation in the series will consider What Next for Multilateralism?

Registration for the June 1 event is currently open here.

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