Saturday October 13, 2012
02:15 PM - 03:45 PM
Tokyo International Forum Hall C

Financial difficulties that began a few years ago have now spread to a number of euro area countries, and indeed to the currency union as a whole. Growth is slowing, financial integration is moving into reverse, and some are questioning the viability of the monetary union itself. Elevated borrowing costs for a number of countries, negative feedback loops between distressed banks and governments, and limited fiscal integration have been among the challenges facing policy makers. European leaders have taken unprecedented actions to establish and strengthen crisis-fighting mechanisms, improve fiscal discipline, and begin creating a more robust economic and monetary union. But technical and political implementation hurdles are significant. Should the euro area crisis intensify, adverse effects would be felt in markets worldwide given the weight of the euro area economy, the euro's role as a global currency, and European banks' international linkages.

Key questions addressed included:
  • the policy response to date, including the establishment of firewalls, potential intervention to alleviate elevated sovereign borrowing costs, and initial steps to establish a banking union;
  • remaining vulnerabilities in the euro area and the potential effects of an intensification of the crisis, including on other regions; and
  • the contours of a more stable and robust economic and monetary union, potentially incorporating a full-fledged banking union and greater fiscal integration.

Panelist(s):Jörg Asmussen , Executive Board Member, European Central Bank
Willem Buiter , Chief Economist, Citigroup
Agustín Carstens , Governor, Bank of Mexico
Yi Gang , Deputy Governor, People’s Bank of China
Vitor Gaspar , Minister of Finance, Portugal
Takehiko Nakao , Vice Minister of Finance for International Affairs, Japan
Moderator(s):David Lipton , First Deputy Managing Director, International Monetary Fund

Organized by:James John, European Department - International Monetary Fund