The 2008 Mortimer Caplin Conference on the World Economy
The New Financial Architecture: A Global Summit
The global economy has been changing at an unprecedented rate, giving rise to entirely new financial architecture. That global framework is now being tested under seismic stresses and strains. At the same time, the locus of economic activity is shifting as new financial centers and patterns of commerce emerge and the established order faces a new wave of global competition. Against that backdrop, the Miller Center of Public Affairs at the University of Virginia convened a global financial summit September 8-9 to provide an unprecedented forum for the world's top financial leaders, freed from their former roles in government, to wrestle with the pressing issues of the day.
In this first-of-its-kind global economic summit, the 2008 Mortimer Caplin Conference on the World Economy brought together senior leaders from around the world to reflect and deliberate on the critical financial questions of the day, and provide their unvarnished views and forward-looking proposals. "The New Financial Architecture: A Global Summit" was developed and managed by former United States Treasury Secretary John W. Snow and Miller Center of Public Affairs Director and former Virginia Governor Gerald L. Baliles.
The final conference report contains four policy recommendations -- strategies for current and future policymakers to lay the groundwork for a new financial architecture to address the interconnected and rapidly changing world economy, focusing on:
- Fixing a broken financial system;
- Remaking institutions for new times;
- Welcoming job creating investment; and
- Moving to sustainable growth policies
Session 1: Financial Futurecast: Stress Testing the Architcture
The global economy is experiencing a tectonic shift as the nexus of economic activity moves between North and South, and West and East. Over the next 20 years, fault lines will form along the strains on food and energy resources; responses to changing global climate conditions; and demographic impacts. These seismic forces will have fundamental and far-reaching implications for growth, development, and trade.
Session 2: Trials in Real-Time: Navigating the Fallout from Today's Financial Turmoil
What began as an American housing market correction quickly spread to financial markets across the globe. The fallout from the subprime crisis is but one of many potential financial risks that the global system faces. As global growth fades, inflationary expectations are reigniting from skyrocketing commodity prices and further dampening growth prospects.
Session 3: Investment Game-Changers: The New Architects of Capital
The investment game is now dominated by entirely new classes of investors, many of which didn’t exist 25 years ago. These global players take many forms, but they all aim to match far-flung pools of savings with investment opportunities on a previously unseen scale. They come in many shapes and flavors: private equity, hedge funds, endowments, pension and social security funds, and the newest super category, sovereign wealth funds. As the line between private and public monies gets more and more blurred, and these market participants grow exponentially in size and scope, governments are considering how to guide their conduct.
Session 4: Who's in Charge: Governing the New Financial Architecture
Since the Bretton Woods institutions were created, the global economy has undergone a sea change. The composition of GDP and the centers of growth are now vastly different. A new financial architecture well beyond the control of national governments has evolved. Recent financial crises have fueled calls for new kinds of global financial regulation. Serious consideration is being given to whether the existing institutions created more than two generations ago—the World Bank, the International Monetary Fund (IMF), and the G-7—are adequate and relevant to cope with these new challenges.