Speech

Managing Director Georgieva’s Remarks at the Conference on Lessons from the Global Financial Crisis in The Age of COVID-19

November 23, 2020

As prepared for delivery

Konbanwa to all those in Japan – and good morning and afternoon to those joining from elsewhere!

Let me start with a big thank you to President Gonokami and his colleagues at Todai -- The University of Tokyo -- for working with us to host this very important conference.

I also would like to wholeheartedly applaud Japan for its continuing leadership on the world stage – not least in support of the IMF. Japan is one of the largest contributors to IMF financial resources and concessional lending facilities, and a steadfast supporter of the Fund’s capacity to build skills and institutions in the developing world.

As we come together for this conference, I think back to the great scientist Albert Einstein. He advised that we should “Learn from yesterday, live for today, and hope for tomorrow.”

Today’s topic of Lessons from the Global Financial Crisis is a reminder that even as we are focused on tackling an unprecedented crisis today, we are better off because we have learned from yesterday. And that gives us hope for tomorrow.

The Global Financial Crisis helped us all realize that the banking system ought to be more resilient. So we worked to reform it, to our great benefit today. Even in the midst of the worst recession since the Great Depression, we have largely maintained financial stability.

This financial resilience we have built up since the Global Financial Crisis – and then we coupled it with nearly $12 trillion of fiscal policy support from governments and a massive injection of liquidity from central banks. Those two things have helped us put a floor under the global economy.

Global financial conditions have eased for many sovereign borrowers. A number of emerging economies with strong fundamentals have been able to return to international capital markets and raise money at relatively low costs.

What does this tell us?

One: it is vital to maintain policy support in a crisis. Exceptional fiscal and monetary measures have gone a long way toward helping people and businesses survive the pandemic. And strong fundamentals in the policy framework enhances a country's ability to act. Going forward, it will be critical for countries not to withdraw support prematurely, and importantly, to continue to target the measures in a way that helps the most vulnerable.

Two: regulatory reforms to strengthen resilience pay off. The actions taken after the Global Financial Crisis helped ensure that banks entered this crisis with much stronger capital and liquidity positions. As we look forward to the world after the pandemic, we should consider what we can do to ensure that we are once again more resilient when we face the next shock – especially the looming climate crisis. We have to expand this concept of resilience to concentrate on three things: resilient people – educated, healthy, with strong social protection; resilient planet – one in which we protect it for the future generations and we diminish the risks of the climate crisis; and resilient finances. We continue to expand what we have done with the banking sector towards the nonbanking financial institutions.

Three: international cooperation in all this is critical. We were able to implement reforms after the Global Financial Crisis so quickly and effectively for one big reason: we worked together. Through the G20, we supported financial regulatory reforms that strengthened the system over the past decade.

In this current crisis, too, we can be much more effective together.

This crisis has demonstrated the great value of learning the lessons of the past – and implementing them in concrete ways so we are more resilient in the face of future shocks.

And now, the question before us is this: can we make 2021 a year where we build forward toward a better world after the pandemic? Will we once again emerge more resilient after a crisis?

Today, I believe we can learn from yesterday. We can build hope for tomorrow. We can do it together. Thank you.