The Ministry of Economy and Finance (MOEF), the Korea Development Institute (KDI), and the Bank of Korea (BOK) jointly hosted the “2024 G20 Global Economy and Financial Stability Conference” over two days (September 3 - 4) in Seoul.
The G20 Financial Stability Conference, which first began in 2013, marks its 10th anniversary this year. Over the years, the conference has played a crucial role in assessing a variety of risk situations, ranging from the U.S. Federal Reserve’s tapering in 2013 to the supply shocks in 2023. It has brought together G20 governments, central banks, international organizations, and scholars from around the world, providing timely policy recommendations to the G20 International Financial Architecture Working Group (IFA WG)[1].
Notably, while previous discussions had focused on financial stability, this year’s conference conducted a comprehensive review of major risk factors in the global economy and financial markets and sought various ways to enhance financial stability, in light of a significant turning point for the global economy.
The conference was attended by approximately 460 key figures from both domestic and international spheres. It began with opening remarks from First Vice Minister Kim Beom-seok, and KDI president Cho Dong-chul, followed by a keynote speech from President of the Center for Global Development Masood Ahmed. More than 30 prominent speakers delivered presentations and participated in discussions across five different sessions.
During the five sessions, discussions centered on major global issues including global shocks and supply chain disruptions, uncertainties in monetary policy, and the impact of AI.
In Session 1 (Economic Policy in Response to Global Shocks), presenters and panelists identified recent global risk factors such as rising debt, increasing fragmentation and protectionism, slowing growth, and climate change. They also proposed collaborative measures, including improving access to the financial system, advocating for re-globalization rather than de-globalization, and considering the sustainability of both the environment and fiscal policies.
In Session 2 (Trade and Investment Cooperation Amid Global Supply Chain Disruptions), participants reached a consensus that the practical benefits of major economies’ supply chain restructuring, such as decoupling, might not be significant. They proposed restoring rules-based multilateral trade and the WTO dispute resolution mechanisms, and discussed strategies to counter foreign protectionist policies, including expanding reserves and leveraging free trade agreements.
In Session 3 (Uncertainty in Monetary Policy and Global Financial Stability), the discussion centered on addressing the debt issues of vulnerable countries in the context of rising debt levels, and prolonged high interest rates, and seeking response measures such as global debt restructuring initiatives, the establishment of fiscal frameworks at the national level, and the prioritization of expenditures. In addition, they exchanged views on the changing patterns of capital flows and possible responses, particularly in light of the recent intensification of policy adjustments by major economies and the expansion of trade and investment restrictions.
In Session 4 (Digital Finance, AI, and Financial Stability), they discussed the financial innovations and structural changes brought about by the rise of tokenization and AI, as well as concerns over escalating vulnerabilities. They also addressed the growing cyber risks in the financial sector and discussed the need for establishing institutional frameworks at the national level and shore up capabilities at the corporate level to effectively respond to these challenges.
Last but not least, in Session 5 (A New Bretton Woods for a New World), participants acknowledged that the current era, characterized by multipolarity, complexity, and interconnectivity, requires different solutions compared to the original Bretton Woods period. They underscored the importance of trade as a foundation for interconnectedness, particularly in the face of complex challenges such as fragmentation, climate change, and rising inequality, while discussing the future direction of international order and cooperative measures, particularly in supporting climate change initiatives and enhancing the capabilities of vulnerable countries.
Going forward, MOEF plans to thoroughly review the policy recommendations discussed at the conference, aiming to incorporate them into international discussions through the G20 IFAWG, of which Korea is a co-chair, and the upcoming G20 Finance Ministers and Central Bank Governors Meeting slated for October 23-24.
[1]A working group focused on building a resilient international financial system and ensuring financial stability.
Please refer to the attached files.
