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Global Economic Outlook | DAVOS 2020

Zhu Min
Chairman at National Institute of Financial Research
+ 5 speakers
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World Economic Forum 2020
January 24, 2020, Davos, Switzerland
World Economic Forum 2020
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Global Economic Outlook | DAVOS 2020
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About speakers

Zhu Min
Chairman at National Institute of Financial Research
Steven Mnuchin
Secretary at U.S. Department of the Treasury
Olaf Scholz
Vice-Chancellor and Federal Minister of Finance of Germany at Federal Ministry of Finance of Germany
Kristalina Georgieva
Managing Director at International Monetary Fund
Haruhiko Kuroda
Governor at Bank of Japan
Christine Lagarde
President at European Central Bank

BA in Economics, Fudan University; MPA, Woodrow Wilson School of Public and International Affairs, Princeton University; MA and PhD in Economics, Johns Hopkins University. Formerly: taught economics at Johns Hopkins University and Fudan University; Group Executive Vice-President, Bank of China; positions with World Bank; Deputy Governor, People's Bank of China; Deputy Managing Director, International Monetary Fund. Trustee, Princeton University. Honorary Trustee, Fudan University. Member, International Council, Business School, Chicago University. Member of the Board of Trustees, World Economic Forum.

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Federal Minister of Finance and Vice-Chancellor of the Federal Republic of Germany since March 2018. 1985, degree in Law, University of Hamburg. Joined the Social Democratic Party of Germany (SPD) in 1975; since then, has served in various positions within the party. 1998-2001 and 2002-11, Member of the German Bundestag. 2007-09, Federal Minister of Labour and Social Affairs. Following this, appointed Deputy Chair of the SPD parliamentary group. 2011-18, served as Mayor of Hamburg. February to April 2018, Acting Chair of the SPD.

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Kristalina Ivanova Georgieva-Kinova (Bulgarian; born 13 August 1953) is a Bulgarian economist serving as Chairwoman and Managing Director of the International Monetary Fund since 2019. She was the Chief Executive of the World Bank Group from 2017 to 2019 and served as Acting President of the World Bank Group from 1 February 2019 to 8 April 2019 following the resignation of Jim Yong Kim. She previously served as Vice-President of the European Commission under Jean-Claude Juncker from 2014 to 2016

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BA in Law, University of Tokyo; MPhil in Economics, University of Oxford. Nearly four decades of professional experience in various capacities, including as Special Adviser to the Cabinet of a Japanese Prime Minister; Professor, Graduate School of Economics, Hitotsubashi University, Tokyo; Vice-Minister of Finance for International Affairs of Japan. 2005-13, President, Asian Development Bank; concurrently, Chairperson of the Board of Directors. Since 2013, Governor of the Bank of Japan.

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Lawyer by background. Practised for 20 years with the international law firm Baker McKenzie; 1999, became Global Chairman. 2005, joined the French government as Trade Secretary. Two years later, became the first woman to hold the post of Finance and Economy Minister of a G7 country. Between 2011 and 2019, eleventh and first woman Managing Director, International Monetary Fund (IMF). Since November 2019 President of the European Central Bank. July 2016, re-elected for a five-year term. Member of the Board of Trustees, World Economic Forum.

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About the talk

What fiscal and monetary measures are necessary to mitigate an economic downturn in 2020?

On the Forum Agenda:

- Reassessing geopolitical risks

- Impact of climate change

- Prioritizing inclusive growth

Speakers: Zhu Min, Steven Mnuchin, Olaf Scholz, Kristalina Georgieva, Haruhiko Kuroda, Christine Lagarde

The World Economic Forum is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas. We believe that progress happens by bringing together people from all walks of life who have the drive and the influence to make positive change.

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#WorldEconomicForum #Davos2020 #GlobalEconomicOutlook

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The fat people who do not have access to energy if we can push companies into the direction of actually anticipating the transition pricing it and making sure that they move to cleaner and energy uses and pain on. My left will have a coming up through the Central Bank of Japan left it to him with my former boss. BCB will have next to her old would have still been ill-treated treasury secretary of the United States that will have of Germany and lost the obvious in Northeast and also important person quiz,

Edina, Georgia. director of international monetary fund Play music. really really so so tell us what do you see the Water Club in 2020 and you have only swimming It is a message that can easily be summed up in 3 minutes. We are in a better place in January 2020. Then we were in October 2019 during our annual meetings. We are projecting growth this year at 3.3% next year 3.4% This is clearly an improvement Visa V the records law as last year of 2.9% And what is driving this positive arthritis?

Are receding the signing of the US China trade deal. Create smart, and we know that uncertainty day was a bad wreck on investments to central banks and we have a great representation here has served the world well. Synchronize tax cuts have given a boost to grout and we actually calculate the size of this boost have a percentage point for last year for this year. And what is very important to recognize is that it was done in a manner that improves impact because these are synchronized chats 49 central banks

71 * race and the source of optimism comes from trade and industrial production bottoming out. Now, we have to recognize that 3.3% is not a fantastic growth. It is sluggish and therefore we have to see more action going Beyond monetary policy to boost growth. We want to see fiscal policy being more aggressive and we want to see structural reforms, especially those that boost competition. And suck create more dynamism to be a priority for governments answer also low-income country this year. How do you say

Emoji Market in low-income countries? Singapore some growth 4.4% for next year 4.6% We have quite a bit of a downgrade in one large emerging market economy Indian. We believe this is temporary with things that India is dealing with a problem that caused that abrupt so down and it will study non-banking financial services. So we expect that a momentum to be in emerging markets. And again, we would love to see more we have to give credit where credit where credit is due to their bright

spots in Emerging Markets asean countries in Asia Vietnam, really? Well, we have upgraded our forecast for China as a result of the signing of the heart rate a deal. A number of African economies are doing very well 78% growth. In fact, we have 40 countries in emerging markets that are going to grow 5% and more and a good number of them are in Africa, but we also have some not-so-good stories. We have a couple of countries that are like a like a Mexico that. Drink

a little less well, and so we would like to see policies in this this country's boosting boosting growth in the next year's us experienced an economic. USA Pawn Well, I think the US economy continues to be the bright spot of growth around the world think if you look at the performance, it's clearly related to the presidency conomic agenda, which has been a combination of tax cuts regulatory relief and trade deals. We couldn't be more excited about the recent trade deal signed the US Mexico Canada agreement and China phase one on top of the deal. We did with Japan and the deal we did with

with Korea. I think when you look at some of the headline numbers inflation is very low in the US incomes are are continuing to rise you looking unemployment at an all-time low and almost every single group GDP came in slightly lower than we would have expected. But that's really just a headline number. I think they were certain things following is had an impact on that being our largest exporter the GM Strike last year. I think the Boeing numbers could impact anywhere from 50 to 70 base. Points this year, but I think we look at a very robust economic

outcome through 2020. Fiscal policy. I think our fiscal policy has worked. I think the tax cuts. You know what I've talked about. We believe that the tax cuts over a 10-year. Of time will pay for themselves. When you look at our budget deficits relative to GDP. I think they're very manageable, but I think there's no question going forward. We need to look at slowing down the rate of growth of government spending in in lowered on a a ratio basis. You're the president of the UCB ECB. It's not only

immoral macro policy involves. So, how do you say Europe in the crystalline eyes along some of the communications that she had filled which is essentially the European Union and more specifically the 19 members of The euro-area which has the benefit of sharing one single currency the Euro and I see some positive I look at the employment numbers and the unemployment numbers just like Steven we never had such good employment numbers. We set back to the pre-crisis times when I look at the wage increase. We are roughly on average at about

2.5% wage increase which is Buna for Central Banker like El Ricon myself. It's because hopefully they will be a transmission channel to prices which in turn will generate inflation, which would certainly make life much easier in many respects and give us room to fight the next truck when there is one. We're not seeing that transmission yet. We're not giving up on that but to the extent that we just continue to grow which Uniworld fuel consumption which increase cost for companies that will somehow be reflected in prices unless we talkin about a competitive landscape that is such

that prices increases are just out of the equation which would seem a little bit strange frankly. So we're waiting for the transmission channel to be reflected into prices. That's the sort of good news bad news. Also recently good news is sprinting of trade. I will sing a bit more of that trade has historically recently been dramatically low and did not feel gross very much. We are delighted to see trade agreements are all cruises being negotiated and concluded because we believe that it will remove

a certainty the world over I think the distribution of the benefits and cost as a result of trade diversion remains to be seen because it's not going to be a win all Arrangement. There will be some down side effects and we certainly at the European Central Bank of measuring where the chips will fall and and who will lose out of that tree diversion under the various agreements. Employment positive a positive what we call the downside risk, which way is on on Earth on our economy's I would say probably

because of what has been resolved between the US and its partners because uncertainty as a beta Devitt brexit is a little bit less than certain, but we still have possible. In December of 2020 we don't know exactly what the trade relationship for the Euro area so that when is the under on the composite PMI, which is essentially how much manufacturing output how much service output to blend them together Mariah is in positive territory. And what we're seeing is a service construction holding strongly and Manufacturing still down and do the 50 which is the

soda first sold at which things are balanced but the forward numbers now that was when you ask companies whether they believe that they will be manufacturing activities that slide on the uptick. So that's also a good friend of mine and we are seeing inflation moving a teeny tiny little bit but this is really minor. It would take a lot more for us to actually change the fundamentally. Thank you. Thank you for this very comprehensive review on the show Mosaic on slow

down, So what will be your policy to support a strong reborn of the Germany called him in this year. We have a very stable Economic Development. There is an old-time high in employment highest peak of people ever employed to Germany. We see today. It's 45 million, which is really a lot. If you look at the whole thing people and there is still a lack of skilled labor be protected very much from the free movement of Labor within the European Union because otherwise we would not have been a Bluetooth with all the demands for skilled labor in Germany, and we now

decided to open a labor market board for skilled labor from countries outside the European Union this all together is a strategy which is dealing with the fact that there is no girls that are strong because there are strong economic activities and that there is demand for labor. So it's not a critical situation. What we also see is that this is a very successful export-oriented, Germany. Economy is naturally suffering. If the girls in the world is slower than it should be and this is what we had the last time.

So we are the most happiest about the reducing of trade tensions received at this stage in the world. So the message that there is a first agreement between United States and China is something which will have effect on development of Rally Sport oriented Industries. This is the same with the Movies with smart way home. The brexit it was not to have brexit. So it will take for the next days in the way which is not a really dramatic situation. And this will also help to encourage the economy. What we did

decide to this is a very expansion area fiscal policy because we have a lot of room for manoeuvre in space. We used it one boards to reduce Texas are we did to shorten a touch of moments decisions like this in in this time and it will be all together 25 pillion a year from the next year on so this is really an impact on the refund from the people, especially the one with those with lower in medium income send this was exactly what we plan to have there.

We also increased investment into infrastructure. This is also the highest figure we ever had in the public in the budget of for Investments and we will be strong enough to continue with this and talk to follow this line even the future. At the site we have something which was happened in Germany end in Europe. And I think another places of the world which we we will discuss later in our debate here. I just mentioned it as Germany decided to go out of the use of coal from producing electric energy within a very short. Of time.

This will mean that that would be huge volumes of Investments mostly from the private sector into the grits and into new ways of producing electric energy with monster and offshore winter craft and so on and this question, which we will discuss more to the details later here is also something which will have an impact on growth in Germany. This is also the case with the many billions that are now in West it from the car industry to produce more electric light cars. This will not just change what we

of course we have in Europe in the board, which this will also cost a lot of investments in research and development on all these things last message Germany succeeded in put it seem to have more than 3% of the GDP weed and west of the research and development. We will increase this further to 3.5 which is one of the highest paid us than we will find in the world. And this is the thing where it is something which will also have effects on further development in future.

LOL lead toward absolutely 3.5 to be honest. I had a part of the Year lost this year. How old is MP3 expanding has been growing one to 1.5% in the last several years? We expect the Japanese economy will continue to grow by one to 1.5% this year as well as next year strong particularly business fixed investment has been quite robust supported by a substantial labor-saving equipment and also R&D investment. These Investments are less susceptible to Chouteau Avenue cycle movement. And so the penis fixed investment is are strong

we expect this strength sold for business fixed investment will continue for some time has been some of the week has been growing phases of personal consumption is fairy soda consumption expenditure fairly strong and Export Saturday last year was Very weak but now we can see that the so-called it cycle has been booming out and I T rated boots at REI reading East. Asia is now increasing Korean coming via so that 2% which is the Japanese context. However, Inflation rate is still less than

1% Actually quite inflation rate is 0.6% inflation rate is 0.7% We have so far away from the 2% inflation Target. So that will continue some time to achieve 2% inflation Target, This is really good, and it was so Before I answer your questions is Christine. So kindly welcomes me in my new job. I want to return that by saying, I'm so incredibly lucky to injuries from you and institutions that is amazing strong-headed and soft-hearted you Christine to go to the risks

after a space around my answer. Lowe's that are Tilting Tower optimism updates to the downside low productivity productivity growth low economic growth. low interest rates low inflation I lived in the 90s in hyperinflation. If anybody wants to tell me then that I would be sitting in front of you worried about low inflation. I with the Flop but yes, we do worry about that because all of this is the foundation for somewhat sluggish global economy. I want to concentrate on specifically on the

low for longer interest rate. And especially when they tilt to negative interest rates. What we see is cheap money. Of course, I'll Temptation For Hire boring of households of businesses of governments and 88 trillions of dollars. That's not a problem. But we look at some of the low-income countries where that is now at levels higher than before the debt crisis and of course, we worry I actually am even more concerned by the fact that with love income for financial institutions.

There is a higher appetite for yields that comes with higher risk and that requires all of us to think about the unintended consequences. And of course when we get into negative interest rate territory, it is a big on the Sabres on the banks and that we need to recognize in conversations. We had some of the present at the annual meetings of the IMF when people talk about low forever that's enough sense to chill down my spine. So they think we owe us policymakers allowed to think about

anything is the fact that we live in a more risk from world. We are in January not even in the end of January and we already had a number of events. That there's parking risks in the global economy and I would argue that this requires policymakers to think of more agile policy list. Prescriptive regulation and more policy that allows anticipation and early action because like it or not. This is the world. We are going to be leaving in two Central Bank. So here is a concern for many peoples in this room

tables. So I would like to start with and how do you even put cash in the safe deposit? Because the next to each other How to hook up houses in the Philippines is the national interest rate. And what's the forecast for you know, how to love or how to learn you know, it's it's it's the risks are out there. There's no question about it. And that's the reason why at the European Central Bank, we decided yesterday to launch a strategy with you because I was trying to G which determines how we Define price

stability Hardware line it with what objective of a relation and how we measure it how we organize it in a complicated debates. This was decided in 2003. That's the last time there was a strategy review. if you sort of put yourself back into a 2003. We had those heavy duty cell phones that waited half a kilo in our pockets. We didn't have social media threats on the Arizer that is waiting on Gross on people's investment determination consumption determination savings vs. Investment choices would not as high as they are today. We would just barely

talking about climate change. Let's face it and inequality was there but it was not the headline that we have at the moment. So they have been structural changes fundamental changes some of which we can address for sure some others that will take a long time to remedy to cure but for which action is needed now. And we have numbers that were completely different if you look at 2003 in those days the G7 countries to take only that group but growing at about 3.6% ring at around

1.3 1.4% with a different distribution with some countries doing much better than the others. But in terms of creation of value of economic value, we were talking about two different. She looks at inflation, which is clearly the Target that is on the mind of central Bankers to help with price stability. Weed in the G7 inflation was I we can distinguish between 1.7 to 1.3? So we have to just revisits how we deal with those issues. And that's exactly what the European Central Bank is going to do. Never a pleasure to have to deal

with low interest rates because low interest rates have to do with the fact that growth is low for you to go a little bit of your secret intend to review to change you mentioned information. That's because the strategy put the rajewski to take we expect that you are so transparent extent that we are making progress within a group in the meantime monetary policy will continue to be determined as it has been so far on the basis of facts and the various guidance is

that we've given but I come back this Podium next year review having that would be awesome. Bungle Japan introduced minus a negative interest rate in 2016. And we have continued to maintain a minus 0.1% on a small portion of a commercial banks with deposit at the bank of Japan positive 0.1% interest rate on the amount of Commercial Bank deposit at the bank said I scare off a purchase interest rate substantially. Contributed to revive the economy and also eradicated depression. We have depression from 1998 through 2013

15 year old depression would have depression every situation situation. So long time including minus negative interest rate means that there might be some side effects on the final System including the banking system. There could be some excess baggage on the financial markets and so far. We have not seen any kind of financial Bubble Witch has Alex s possible side effect is to reduce the banking sector profitability and the Venturi reduce banking sector ability to intermediate sanction

intermediary function meaning They are lending activities might become quite quite quite small now in the alarms, I buy two and a half percent increase by 2% every year so far, but we are very careful and we continue to monitor the financial sector including the banking sector weather. negatively affected by hour Return the financial stability of your sisters key, but also complains about the narrow. Margin. We probably will come back to that issue as well. Answer several People magazine the good news about the US and Canada side of face when treating, you

know, you're going to start a trade association with UK Europe. Well, we've already started the conversations with the EU. We look forward to making progress with them and I think on the UK we've had the president has been clear going back to the election that the UK is our number one Ally and will be at the top of the list of trade agreements. So we look forward to getting that done this year were encouraged. We also know that got to do a deal with the EU,

but we look forward to hopefully getting photos deals done this year. Security Management in the UK UK is going to leave the EU short fuel economy and in broscience European economy. I think that would not have a big impact that the UK will have left the European Union and some days. And especially not because we avoided a hard brexit. So this was the key question, which was also having an effect on the confidence of people in the business sector whether they should invest or not that they

were not sure about that question. So there is a tax left which is due now get to the agreement about the fur the relationship between between the European Union and the UK, but if this is also managed, I'm absolutely confident that especially on the continent to save from the British view that there will be no negative effect of this development. It will be more difficult for the UK obviously because the business model must be reorganized WBA lower importance that we will be still be a very big place of financial activities in

London, but it will be different as it has been today as it is today and this over to have some Consequences we will see in the next year's I think for Europe. The more important question is that we continue with what is already agreed between than president juncker and President Trump about to discussions about rate. I'm relatively confident that we will be successful with this with anyone knows that the free trade is something that just supposing wealth and for Europe. There are sometimes to be soft with your now on the table. One of them is forming banking

Union and capital markets Union because I think we have lower growth as we would have if we would have done this is the piece off to start already are there will be even better interest rates if the money could be used at many places in Europe and not it is not that difficult as it yesterday. So we need this development and also for having more equity in finance in Crumpet companies as we have not in Europe today, there is a complete difference between you know, States of Europe its 80% Equity financing in the United States. It's the 20% in Europe and if we could Barrel

racing bit this would have a good effect on growth and then and then in Europe, but the brexit I think will not have a negative effect. Eucharist leaving for the senior parent the current Euros. Do you think you could and the EU will be able to settle all the trade deals with Zing. Next to a month? There is no debate between the European Union and the UK how we will manage it. Yes. If you leave the European Union you leave it and you are I'm pissed means that you cannot be in and have only the

possibility of the advantage is coming from being a member of the European Union and the outs and having the advantages of a remote in so it is something which will be have to be balanced and the European commission already set the necessary words to that question. I think we will find solutions could be not as special competitive Advantage from being outside. Is this year? Really? The thing for doubles is focused on the sustainability of the looking for the next 14 years of it is absolutely important

to have the government think about the structure policy to support sustainable growth in the next 10 years. Let me start by saying that it is a great conversation to have because it provides an opportunity to think of policies good for the environment and good for the economy good for people to lean on the negative and talk about the risks and I will talk about the list but I want to start from the point that transformative Investments for low-carbon climate-resilient development can be

a major stimulus for growth. They made very well be that Silver Bullet. We need to deal with the Fallout I talked before. But yes from the position of the IMF. We do look at the risks and we look at this risk strictly within our mandate Financial stability risk. When we are in a situation when European Union comes with a clear. Directions by 2030 for becoming carbon-neutral that inevitably would mean that investments in certain sectors of the economy that were

profitable and are profitable maybe less so as well as that risk stemming from climate change from hurricanes from flats from droughts. They would be waited as part of the transformative policies and I expect that we will see that kind of pick up of sustainability Investments with everybody here talks about Larry Fink letter. I don't know what the word is y'all but we heard about that new impetus in the financial world. So what does that mean from a risk management perspective Financial sustainability risk men? perspective it means that we do

have to be able to record this risks in a standardized fashion in other words companies and financial institutions have to be able to report in a harmonized manner and it also means that those who are watching, the Financial Health of our world like the financial stability like to be able to stress test financial institutions for this new types of wrist transitional in terms of sectors of the economy coming down or coming up as well as those related to climate Unfortunately more frequent and more distracted. The other aspect

is how to stimulate that I want to go to the positive because risk management as important as it is I can tell you it doesn't really excite people that much excite people. Can we inject more growth? Can we create new jobs in the in the in the new green economy if we had the right policies when you sent this weekend and create the momentum for the tremendous liquidity we have in the world that is sitting idle. And then have a new. Hopefully up up swing for summer talking about the way to stimulate inflation

momentum that makes the liquidity moving a little bit faster and I think we have to embrace that positive image. I am very concerned when I sit in meetings. And Gloom that we are taking the wrong approach to that issue of sustainability environment. We had a great time. There was a great job. I like dogs that goes like this God calls Moses and says, I have two pieces of news for you. Which one do you want? First Moses says the good news first. Says split the sea and take your people to

safety Moses says they cannot be bad news after this. God says the bad news is that you guys to make an environmental impact assessment first. Mango, as bad news. I don't think we would go to have to recognize the risks about climate change. Thank you very much. So sexy and so you really looking for and a few other things but let me just comment and I think this is an important subject. But first, I think that the words that we used to describe these issues are

important. So I think the word should be environmental issues and not climate change since climate change is one of of many issues now, there's no question in terms of the us and our policy the president very much believes in clean air. Unclean water and if you look at the us, we become much more efficient in terms of carbon through technology and use of energy. I think as you look at China and India, I think these are areas where there needs to be significant Improvement in terms of environmental issues. I think

there's an abundance of clean gas in in the world will be a lot of progress on this. So, you know, I think this is one of many important issues. I also think, you know notwithstanding my German friends having a 30 year plan. I think technology is going to change a lot in in 30 years and some of the issues that we think exist today technology will change so I think it's it's hard to predict. So I think there's no question, you know, this is an issue, but I would just I understand class. It's

it's an economic issue because there's no question environmental issues impact the economy. I think it's one of many important issues. We happen to be in a situation today where there's a potential health issue and the spread of this health issues over the next 20 or 30 years are very important issues for the economy. I think we've also talked about National Security issues. The president's very clear Iran cannot have a nuclear weapon. These are also issues that impact the region in the economy. So not to minimize the environmental

issue. I think this is one of many issues. That's an important economic issue and I hope we all work together. We support the trillion Tree project. I hope we can all work together in improving the environment over the next 20-30 years and the reason why we left the power Agreement was not because we don't support the environment was we thought it wasn't a fair and balanced agreement. The u.s. Is making a lot of progress and we encourage others and I would just say one last comment on this. There's way too many people in the developing world that do not have access to

electricity. So it is as much as we want to talk about the environmental issues. There are still a large number of people and we need to work very hard to create an environment for these people where they have better lives. Thanks to you sexually Whitney the Brule the definition of the sustainability of really in your heart. I guess. Let me see use that word. It's a part of your strategic review. climate change shoulders related issues I will tell you that but I was I was thinking of what crystalina said in what excites us and I was

reminded of what marketing and advertising people used to say that makes us move and they list three items one is sex. Second is fear. His greed was the first because that's nothing to do with environmentally sustainable population growth factor is there and if we were to forget about complete disaster that are taking place around the world and I'm delighted to hear the issue of environmental sustainability because your rights even biodiversity is a key component of what we need to protect in order to have an environment

that is sustainable and a planet that we passed on to children and grandchildren in a better place, hopefully, so Here, I think we have that on the table. Greet with all due respect to the corporate sector and I was a member of the corporate sector of a 20 years of my life. It's fantastic to see the likes of Bank of America Microsoft and many others around the world. Seriously because it matters to them personally but also because it's going to make sense for the bottom line at the end of the day because they take longer to

the next quarter to nine these two you've got a few other pieces missing because it's a challenge that will require huge corporation, you know corporate sector regulators and Central Bankers. Yes. Does I want to respond to your point at the moment of 77,000 articles published deal with environmental sustainability of this world can actually do some work and include those risks and how we try to measure them as best as we can. Into their economic analysis forecast models and stress testing tools that are used on a regular basis with the banking sector.

That's one component analysis. The stress testing that is taking place on that needs to be seriously revamped because we don't look at 30 years into the making wrist as much shoulder 10 today. How will the banking sector behave and operate if there is a short to the economy in the next three years? That's not what we talkin about her talking about something that is further away. I'm also need to look for those of us who had to do quantitative easing and for those of us who have reserves. And for those of us who have big pension system to run.

Do we value those risks that are there in those portfolios? Is it the right method are we taking climate change environmental sustainability into account. Do we need to Discount some of those instruments that we have in our portfolios? How do we do that? And clearly it's this is all but we're going to have to drill down into how we measure the accountants are going to have to be on board. How do you write the rating agencies are going to have to be on board? How do we assess internally or our teams are going to have to

be on board and at the end of the day is going to be disclosed and stress test, but really how do you actually account? So that wrist is anticipated measured hopefully mitigated. We are in a bunch of shape because then those externalities have been put into our anticipation and come into our decision-making processes station, whether we don't deal with it or whether we deal with it, they will be some inflation consequences. I would much better have been facing consequences that

Christina was referring to because more Investments is needed because more research is needed because productivity improves that would be for me the health information that we are happy to welcome and consequences from because it's going to be much better for us all and particularly for those that are underprivileged and most exposed actually can do a lot of things. I go with Anna and comments on the choke or your three issues all I'll skip on that but I think disclosure is a good idea

whether it should be voluntary or it should be enforced. I personally think it should be voluntary but Christy and I think you can have a lot of people look at this in model it I just don't want to kid ourselves. I think there's no way we can possibly model what these risks are over the next thirty years with a level of certainty given what I think is changes in technology and everything along the way what we can say is there are things that we can do that can move towards cleaner energy and create better environmental issues over the next 10 years. That's something we have

a lot of visibility. You know, I don't think that we can create this level of certainty over the next 30 Years what the risks are and I think everybody says look there is a transformation how long the transformation takes and again, I don't mean to minimize. There's lots of other issues we could talk about, you know, kind of what's the risk to kind of if oil prices go up to $120 because of regional issues on the world economy. So women shoes that the world is dependent upon having a reasonable priced energy for the next 10 or 20 years or we're not going to

create growth and we're not going to create jobs. So it again I just think all these things need to be balanced in this is one of many issues. We should look at modeling. You complete your right to say that we have to price the the cost of transition and to your point where we if we do that and if we have pressure either voluntarily or involuntarily. Wilson deal with the point that you are making which is the default 20 people who do not have access to energy

if we can push companies into the direction of actually anticipating the transition pricing it and making sure that they move to cleaner and cleaner and sealer and cleaner energy uses. I don't think we know how to price these things. So I think we're overestimating the cost and if you want to put a tax on people, you know, go ahead and put the carbon tax that is a tax on hard-working people and I personally think the cost for going to be much lower 10 years from now, but good

technology than we think they are. Boys, this is been fun. Girl is quite real dearly. Gracia consumption tax increase but big typhoons affected the economy and production. I mean, Is really intensified in Japan in which a substantial part was two strings on the infrastructure and less susceptible to natural disasters. So I think two things. The Japanese economy must do more to reduce greenhouse-gas emissions and and the continuing education of climate change in the energy

FS Network for good. The financial system and at this stage the network is to focus rating climate-related risks in Social stability monitoring and Central Bankers are acting this fantastic Minister shoes. Yeah, I just would like to react to some of the things that have been set on this panel and on the debate. We already have I think there is something like climate change and it really hurts us and if we will not be able to manage it and this will be a lot of negative effects on our life on the life of the words

on the economy. Just imagine in 2050. We will be approximately 10 billion people on the world. I did mention that we are successful and having better growth in the least developed and developing countries, which possibly caused the effect that they have all around parts of the income per person we have in our countries in the West. And then I mentioned this will be done with all the possible energies and the techniques we have today. This will be a ball that could not really be livable

for anyone on the globe. So it is key that we do something now and you must not be too intelligent to imagine that in 5 10 15 or 20 years. We will have Global debates. What's the right to admit and to you to admissions of any country and possibly per person and if we do not prepare for that time, we will have severe economic damages in our country SO waiting for the others is a possibly very dangerous strategy. And this is why I think it's necessary and right that you were open.

Germany flight to be CU to neutral and 2050, which is a very very I'm just strong weight. We have ahead of us and we have to do a lot of things Germany now decided to start 2021 with CO2 pricing prices that will continuously grow so that the people have chances to decide and two companies have a chance to decide what they will do to avoid the pricing and having better techniques with lower emissions and we decided that we will go out of the use of Coal Energy. This will be done in a very short time latest 2038 today 40

GB of energy Supply which is produced this why we invest a lot of money to help to Regions which are now working with this industry's so that they have good jobs in future as well and that they understand that there is solidarity. But now after we did this bet investments will be necessary privates mostly and public Investments which will increase the great which will make it feasible that we have 65% of renewable energies in 2030 and Eve much more in the next year's that we will go into the use of hydrogen

and that people use this instead of fossil energy that must be a big economic and technological approach within years. And this is the years which start in District 8 and it will be a big big show. And this is the same which is happening with the car industry. So I think those Uber start was doing the necessary things. We're not just solve the problem. But possibly one of the ones movie the ones that develop the technology switch make it feasible for all of us to avoid too much emissions in the world because there are cheap efficient Technologies already

developed and on the market. But this is the last session. I want to take the Liberty to take extra sweet when it's close with your permission to the gentleman in the front. Can you speak louder? Okay. I think you should come closer the Common Ground here for Capital markets Regulators in consumers on the issue of the environment. I'd say a disclosure broadly is a good thing and capital markets. So that. That allows investors to make decisions that allows Capital markets to function of

material risks do need to be disclosed. So, yes, generally I think disclosure is a good thing as as I commented and again, we have laws that the deal with that such a fascinating conversation for a risk remains, but the commitment to for the sustainable growth in the next 10 years of this is really fantastic closing session to please show me pic. hands full XL accent analyst

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