Seminar Access to or Excess of Finance

The experience of emerging and developing countries during the current crisis

Subsequent to its international Financial Sector Symposium 2009 "Preserving Access to Finance During the Global Crisis" in Berlin, KfW Development Bank organized a seminar ?Access to Finance or Excess of Finance" in Frankfurt and Bonn on 14.04 and 19.04, respectively.
About 80 Staff from BMZ, GTZ, KfW, and other representatives of the financial sector used the opportunity to reflect and discuss findings and recent sector reforms with experts.
Michael Klein, former Chief Economist of IFC provided the participants with a global overview discussing the differentiated impact of the crisis on emerging and developing countries.
Subsequently Adalbert Winkler, Professor for Development Finance at the Frankfurt School of Finance and Management, discussed benefits and risks of opening financial markets for developing and emerging markets, highlighting higher potential for growth at the cost of higher volatility.

Wolfgang Bücker , GTZ Head of Section Financial Systems Development, and Thomas Losse-Müller, GTZ Head of Section Making Finance Work for Africa, subsequently presented and discussed the relevance of the current G20 reforms in prudential regulation, especially the modification of the Basel 2 frameworks for developing and emerging markets, stressing the importance of gradual approach in implementing reforms.

Monika Beck , Division Chief Financial and Private Sector Development Europe, discussed the differentiated crisis resilience of financial institution types in South East Europe, a region particularly adversely affected by the current financial crisis. She highlighted cases of excessive supply of finance coupled with irresponsible marketing practices that lead to client over indebtedness and stressed the importance of responsible finance policies for financial institutions.

Given the importance of public stimulus programs in weathering the crisis in general and socially targeted programs in particular, Christine Weigand, Sector Economist of KfW?s Social Security Department, addressed the potential of social protection and income transfer programs in stabilizing the real sector, and in serving the poorer strata of the population and encouraging the use of critical basic health and education services and mitigating the impact of economic crises for the poor in emerging and developing countries. She pointed to the large number of positive ex-post evaluation studies stressed that prudent fiscal management is important to create the necessary fiscal space for such transfer payments.

Finally Michael Klein provided an outlook on the post crisis decade anticipating lasting fiscal constraints in developed economies, the increasing cost and demand for pension and old age health services and the challenge to provide ODA under increasing fiscal constraints. He pointed to some possible solutions to contain cost in the context of increasing globalization. He emphasized that the classical North-South resource transfer and investment will increasingly be replaced by the growing importance of South-South and South-North investment directions. Highlighting better access to mobile phones compared to drinking water he pointed to the importance of proper pricing policies to encourage an increasing deal flow for private investment projects.

Last updated: April 2010