Capital flows

Speakers voice conflicting views on untamed capital flows - are they a threat or a vital contribution to the world economy?

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Hans-Helmut Kotz, Stewart Fleming and Kurt Viermetz

Oil states favour dollar

“Most investments of oil states’ savings into western capital markets have been channelled into the US dollar. If one’s view is that the dollar has to weaken significantly further to bring down the US current account deficit, the dollar decline needs to be managed in a way that does not lead to dollar holders heading for the exit.”

Stewart Fleming, Business History Unit, London School of Economics

Early warnings unheard

“Massive management, regulatory and monetary policy failures lie behind the global financial crisis. Many economists have long been warning about such a meltdown. Alan Greenspan bears heavy responsibility. Why were the authorities in most countries, with the notable exception of Spain, so slow to respond to these concerns?” Download speech

Mobility barriers removed

“For many years, the financial network of the capitalist world, especially in New York and London, has done an incredibly intensive amount of work, especially by lobbying, to remove almost all barriers to capital mobility. I am reminded of what old Professor Charles Gulick from Berkeley used to say: 'Leave everything to laissez-faire in the certainty that it will go to hell.'” Download speech

Kurt Viermetz, Supervisory Board Chairman, Deutsche Börse

Capital flows necessary

"We don't need less international capital flows, we may need more. Look at the banks in recent months, even the insurance industry. Both desperately approached international investors for fresh capital to deal with write-offs or trading losses. Governments had to apply huge rescue packages due to lack of  international capital." Download speech