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Equitable globalization needed to tackle protectionism: BNM
Bank Negara Malaysia (BNM) calls for more efforts to create a safer financial globalization with more equitable benefits distributed among the countries, citing the unequal benefit has led to fragmented market and the rising inward looking measures.
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Bank Negara Malaysia headquarters in Kuala Lumpur. (Courtesy of http://www.bnm.gov.my/File)
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ank Negara Malaysia (BNM) has called for more effort to create safer financial globalization with more equitable benefits distributed among countries, pointing out that unequal benefits had led to a fragmented market and rising inward-looking measures.
Between November 2008 to December 2009, 390 trade protectionist measures were announced or implemented by 19 of the G20 members, BNM governor Muhammad bin Ibrahim pointed out in his remarks during International Monetary Fund (IMF)-BNM Summer Conference on “Some Perspectives on Globalization and its Aftermath.”
Ironically, financial globalization channels were not addressed as quickly with policymakers, particularly in advanced economies, and a consensus had yet to be reached on recognizing the harmful effects of free capital mobility that was disconnected from real economic activity.
“This is an issue that many remain divided on until today. While we have instituted policy reforms to better manage our financial systems and institutions, more can be done. We need effective frameworks to ensure financial globalization contributes to risk diversification, consumption smoothing and efficient intermediation of productive capital across international borders,” he said on Tuesday.
According to Muhammad, the global community should decisively address the risks posed by large and volatile short-term capital flows. He also called on the IMF to do more to ensure that global financial aspirations considered diverse circumstances and national objectives.
“Not enough is being done at the global level to manage the negative spill-overs to recipient countries. Here, the IMF can play its role as the trusted policy advisor,” he said. (ags)
