The international financial cycle, including changes in monetary policy stance in advanced economies, creates several challenges for emerging markets and developing economies. While many countries have strengthened their policy frameworks to cope with a more challenging external environment, the prevalence of high private debt, both corporate and household, poses specific challenges to policymakers especially in the Asia-Pacific region. The conference will tease out these challenges by discussing the appropriate macroeconomic policy response, including macroprudential policy, and cross-country experience in dealing with private debt overhang given shifts in the international financial cycle. It aims to facilitate exchanges of views and experiences among policy makers and practitioners, and to come up with useful policy lessons learnt from countries in the region.
The conference will have three sessions:
- The first session “Practical Lessons in Addressing High Private Debt” will discuss how countries can effectively deleverage high household and/or corporate debt to avoid impacts of debt overhang while maneuvering international financial cycles. This session will explore the practical experiences of countries that have implemented effective debt resolution strategies and challenges they faced.
- The second session “Macro Policy Response to the International Financial Cycle” will discuss how countries in the region have used their macroeconomic policy tools to deal with the international financial cycle, including through monetary, fiscal, and exchange rate policies in the face of volatile capital flows.
- The third session “Nexus Between Monetary and Macroprudential Policy” will highlight lessons learnt from the implementation of macroprudential policies (MPPs) by countries with different policy frameworks. It will explore the impact of monetary policy on financial stability, and the interplay between monetary policy, MPPs and capital flow measures (CFMs) in managing risks.