By Penza News
More than 1,200 experts, analysts, representatives of large banks, foreign regulators, professional associations and Media from Russia and 37 foreign countries took part in the 28th International Financial Congress (IFC), which was held in St. Petersburg on July 3–5, 2019.
According to the organizers, the largest delegations arrived in the Russian Northern capital from the US, UK, Germany and France. Representatives of Azerbaijan, Bangladesh, Bermuda, Denmark, Thailand and Uruguay attended the IFC for the first time.
Opening the business program of the Congress, Governor of the Bank of Russia Elvira Nabiullina emphasized the need for structural changes and fundamental improvement of the investment climate to ensure the growth of the Russian economy.
“It’s only the transformational change of structure that is to ramp up the potential, utilize all the economic scope to boost the growth rates and ultimately to enhance people’s well-being. Transformations that are to contribute to the redistribution of resources, labour and economic forces into industries with greater impact, greater productivity, with greater added value. The main thing that needs to be done for the economy to snowball is a radical improvement of the investment climate,” she said.
“We still need to make a better business environment, which will take a lot of time and effort. What can and must the financial system do to boost economic growth in this situation? The financial system must become part of structural changes through forming a long-term investment resources, developing stock market, and aiming at financing effective projects,” Elvira Nabiullina added.
The Congress included two plenary sessions, 43 business sessions, and the business breakfast co-organized by the Bank of Russia and The Bell Club. The IFC participants discussed infrastructure projects for the financial market, the central banks policies, new approaches to finance for house construction, growth of non-state pensions, macroprudential policy, compliance, and anti-money laundering legislation, problems of identification and evaluation of risks to financial stability, as well as bank safety, increasing regulatory capital and other topics.
Commenting on the results of the Congress that ended in St. Petersburg, Stephen Cecchetti from Brandeis International Business School said that took part in two major events of the IFC.
“The first one was Bank of Russia International Research Conference ‘Macroprudential Policy Effectiveness: Theory and Practice, which took place on July 3. This conference is a clear indication of the high quality of the research function at the Bank of Russia. The papers were excellent, and the discussions extremely informative. I want to emphasize the importance of this development for the quality of monetary and financial stability policy in Russia. With high-quality research, policymakers have access to the best possible analysis and advice that can inform their decisions,” the expert told PenzaNews.
This makes for better outcomes for society, he said.
“On July 4, I attended the morning sessions – the speech by Governor
[of the Bank of Russia Elvira]
Nabiullina as part of plenary session ‘Central Bank’s Policy Design: Pursuing Multiple Objectives in Times of Increasing Market Complexity and Risk Variety’ and I participated in the Session ‘Challenges for the EME Central Banks’ Policies Amid Global Uncertainty.’ I can say that I have a positive impression of the International Financial Congress,” Stephen Cecchetti said.
“The International Financial Congress attracts a large audience of Russian finance professionals to listen and interact with very high-quality speakers. I learn both from other speakers – for example, Boris Vujcic, Governor of the Bank of Croatia, had a very interesting intervention at the plenary panel the morning of 4 July – and from economists at the Bank of Russia,” he said.
He also pointed to the “very interesting discussions” on “the monetary policy challenges in an open economy with a flexible exchange rate.”
“To see the issue, consider the following problem: Monetary policymakers see inflation above their target and current output in excess of potential output – a positive output gap. Conventional wisdom gained primarily from experience in large advanced economies is that the central bank should raise interest rates. But, in emerging market economy with open capital markets and a flexible exchange rate, raising interest rates increases capital inflows and drives the value of the exchange rate up. Together, this drives inflation and output up, not down. So, what should policymakers do? This is a problem for a number of countries, and the solution is to implement alternative, macroprudential policies,” Stephen Cecchetti explained.
Traditionally, Russian Standard Bank has become an active Congress participant. The bank representatives consider the IFC one of the country’s central business platforms that provides opportunity to discuss important financial topics – from monetary policy and digitalization of the banking structure to macroeconomics and microfinance.
“The IFC became an ideal place for exchanging views in the banking sector between market participants; it provided an opportunity to learn the position of the Bank of Russia management on the most pressing issues and ways to solve them,” commented Russian Standard Bank’s PR department.
According to Alexander Samokhvalov, Chairman of the Management Board at Russian Standard Bank, one of the important topics touched upon by Elvira Nabiullina at the Congress in St. Petersburg was the need to introduce an institution of self-regulation in the banking market.
He said that Russian Standard Bank has a positive attitude towards this idea, which primarily aims at improving the quality of services provided to customers.
“This practice is already being applied in a number of areas: real estate, financial organizations and others, where self-regulatory organizations (SROs) have given a good account of themselves. The transition of the banking system to an SRO will most likely take more than one year, but if it takes into account the interests of both banks and their customers, this will generally have a positive effect on the overall level of service and quality of customer service,” Alexander Samokhvalov said.
In turn, Iikka Korhonen, Head of the Bank of Finland’s Economies in Transition BOFIT Research Institute, also said he was pleased to attend the Congress.
“I’ve only participated in the first day of the Congress but the discussions that I’ve seen were quite good — they gave a good overview of how things are regarding central banks and other topics in financial sphere,” he said adding that the IFC fully met his expectations.
Moreover, Iikka Korhonen noted that the format of the Congress was convenient, and the event itself was organized at a high level.
Speaking about the popularity of the Congress, Head of the BOFIT Research Institute stressed that it was not his first time at the IFC, therefore he noticed an increase in the number of visitors.
“I’ve actually participated at the IFC for several times before and if I’m not mistaken, this year there were more people participating in the event than a year or two ago,” he said.
Meanwhile, Giuseppe Bruno, Director, Head of Support for Economics and Statistics, Bank of Italy, who also personally attended the Congress, called the IFC program comprehensive.
“The IFC included the hottest topics today relevant for different actors of the Financial sector: Central Banks, public institutions, banks, insurances and new entrants such as those falling under the umbrella term of Fintech. The general and parallel sessions have been effective,” Giuseppe Bruno said, adding, however, that the general sessions which were held in the Presidential Library could have been arranged in the English language.
In his opinion, the event “has been organized very well” and “the participation to the IFC Conference has been quite rewarding.”
“The Congress provided an occasion to listen different views on the most recent evolutions on FinTech and technological evolutions impacting the banking industries in payments, supervision and regulation. Another important Conference takeaway is the common awareness of the need to deal the new challenges arising from Cyber-threats and the pervasive use mobile devices for banking operation. Cooperation on these different aspects will surely be welfare improving,” Giuseppe Bruno concluded.