Events

Sovereign Debt Management Forum 2018: “Is There Life After Debt?”

October 24-25, 2018

Washington, D.C.

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The World Bank Treasury Public Debt Management Advisory held its ninth Sovereign Debt Management Forum: “Is There Life After Debt?” on October 24-25, 2018, in Washington, DC.

  • Global debt reached its record levels,
  • Normalization of monetary policies,
  • Expected rise of interest rates, 
  • And an ever-growing need for public funding.

All that makes public debt management is even more critical than before. More than 180 senior debt managers, economic policymakers, academics, members from international organizations, market participants and independent consultants from 61 different countries convened at 2018 Sovereign Debt Management Forum to discuss strategies for debt managers in this new era.

  • Keynote speakers included Kenneth Rogoff from Harvard University, and Graeme Wheeler, former World Bank Treasurer and Former Governor of the Reserve Bank of New Zealand.  Joaquim Levy, Managing Director and Chief Financial Officer of the World Bank Group, delivered the opening remarks.

    In his opening remarks, Joaquim Levy, Managing Director and Chief Financial Officer of the World Bank Group, reminded the audience of the World Bank Group’s ever more critical role as an effective and reliable partner to influence development outcomes amid massive challenges in many parts of the world. He stressed that low interest rates in the wake of the global financial crises have fueled capital flows to developing countries in search for higher yields, but a normalization process is in effect now, which has made funding harder to obtain while debt, including corporate debt, has reached unprecedented levels. “If interest rates rise slowly, supported by strengthening growth, financing conditions and the capital flows to emerging market and developing economies will continue to be generally supportive. But even in this generally benign scenario, it is important that countries be prepared to build buffers to sail through the next 18 to 24 months of gradual global adjustments,” he said.

    Professor Rogoff, in his key note speech, stated that the reason for low interest rates will change and we will see inflation again. Also, the historically high global debt levels, combined with a strong dollar, capital outflows from emerging markets, and monetary policy normalization leading to rising interest rates will require sound debt management skills. He also pointed out the role technology may play in the future, saying, “Massive future productivity growth from artificial intelligence should not be discounted just because effects are only beginning to be felt“.

    In his key note speech, Graeme Wheeler, underscored the roles of the public debt managers which have changed since the global financial crisis. He listed continued record high global and government debt, slower global growth and possible recession in advanced economies, and  more complex interaction with macro-economic policy agencies among the key challenges facing the debt managers. Stressing the need for more active public debt management, he suggested more interaction with central banks, fiscal policymakers and financial market regulators to be a part of debt management in this new era.

    Throughout the three plenary and eight breakout sessions of the Forum, with more than 40 presenters, the policymakers engaged in interactive debates about the sustainability of the current elevated levels of debt, exploring topics such as major risks to the global economy, subnational debt management, inflation linked bonds, thematic bonds, debt transparency, domestic bond markets, government guarantees, liability management operations and asset and liability management.

    Despite differing country contexts, participants converged around several consensus areas. In his closing remarks, Marcelo Giugale, World Bank Director for Financial Advisory and Banking, summarized the key takeaways:

    -Keeping the debt portfolio free of exposure to risks such as interest rate risk, currency risk, credit risk and operational risk.

    -Being prepared for a future where there will be a push for more transparency, especially around managing contingent liabilities, a need for accounting for the assets as well as the liabilities on the balance sheet, and an opportunity to better cater for the needs of the growing investor base, especially those who care about impact.

    He said: “The World Bank Treasury will always be a connector, a clearing house for knowledge, a permanent forum of experiences and expertise to support public debt managers in the new era of heightened risk.” 

    Debt Management Advisory will hold their next Forum in 2020.

  • Keynote Address: Greame Wheeler

    Keynote Address: Kenneth Rogoff

    Plenary Session 1: What Are The Major Risks To The Global Economy And How Can They Affect Debt Managers Around The World?

    Plenary Session 2: Next Generation Of Domestic Bond Markets And How To Boost Resilience 

    Plenary Session 3: A Different Conceptual Approach To Asset And Liability Management

    Breakout Session 1: Foreign Currency Selection: Three Ways To Solve The Puzzle

    Breakout Session 2: How To Address The Accumulation Of Risks In Subnational Debt Management Through Capacity Building And Stronger Coordination?

    Breakout Session 3: Risks For The Developing Countries

    Breakout Session 4: What Is The Role Of Inflation-Linked Bonds For The Sovereigns?

    Breakout Session 5: Thematic Bonds: Blossoms Of The Bond Market?

     

    Breakout Session 6: Mind The Gap: Seeking Public And Private Sector Collaboration For Improved Debt Transparency

    Breakout Session 7: Don’t Derail – Keep Your Guarantees And Lending On Track

     

    Breakout Session 8: Being Active On The Day After: The Liability Management Operations 

     

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