Luigi Federico Signorini: Introductory remarks - 4th joint workshop on international capital flows and financial policies

Introductory remarks by Mr Luigi Federico Signorini, Senior Deputy Governor of the Bank of Italy, at the Bank of England – Bank of France – IMF – OECD – Bank of Italy 4th Joint Workshop on international capital flows and financial policies, Rome, 6 October 2023. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and Gentlemen,

It is with great pleasure that I welcome you to the 4th Joint Workshop on International Capital Flows and Financial Policies, organised by the Bank of England, Banque de France, the International Monetary Fund (IMF), the Organisation for Economic Cooperation and Development (OECD) and Banca d'Italia.

Current developments are raising a number of important, and sometimes new, issues in the field.

If one looks at the monetary tightening cycle that is ongoing in the major advanced economies, while there is clear evidence of increased bond outflows from emerging market economies, and of some pressure on their currencies, the fact is that so far global financial markets have seen nothing as disruptive as during past episodes of global tension, such as the financial crisis of 2008-2009 and, though to a lesser extent, the taper tantrum of 2013.

There are several possible explanations for this. They include sounder macro policies by EMEs leading to fewer imbalances, deeper internal financial markets, and a better emergency management of capital flows. On the last point, to quote but one piece of evidence, a joint Bank of Italy-Bank of England working paper showed that, during the Covid-19 sudden stop, emerging markets engaged in the coordinated deployment of several tools (monetary, fiscal and macroprudential), and policy actions were by and large effective. This suggests (among other things) that a number of EMEs have adopted insights from the IMF's institutional view and from the Integrated Policy Framework. In various ways, many of them have become more mature, as well as richer.