William White, along with Daniela Gabor, participated in a 10 November webinar organized by Green Members of the European Parliament. Gabor focussed on desired changes to European financial regulation, once the pandemic is over.  White paid most attention to the issue of financial forbearance during the pandemic and the need for a final resolution of debt problems over time. He began by noting that ultra easy monetary policy was increasingly ineffective in stimulating aggregate demand, that its unwelcome side effects were becoming increasingly obvious, and that “exit” was becoming increasingly difficult. He then went on to document how  regulatory forbearance in Europe suffered from exactly the same three shortcomings. This reflects the fact that, just as covid-19 is especially harmful to patients with preconditions, the European banking system has been weakened by non-performing loans and very low profitability. These underlying issues must be resolved  before the financial system can play its full role in economic recovery.

https://sven-giegold.de/en/webinar-deregulation-for-future-new/

The NAEC (New Approaches to Economic Challenges) group at the OECD organized a panel discussion on the occasion of the publication of a book called “The financial system”. The panel was chaired by Rana Foroofar, Associate Editor of the Financial Times, who concluded by saying that the NAEC group “is doing possibly the most important conversation building in the world on these topics”. William White discussed his chapter in the NAEC book, in particular the practical lessons for policy makers from embracing the concept of the economy as a complex, adaptive system.

https://www.oecd.org/naec/events/the-financial-system.htm

William White contributed to a panel on 23 September that was organized by the Balsillie School of International Affairs in Waterloo, Canada. Other panelists were Diana Fox Carney, a climate and policy expert, and John Hancock, a Senior Adviser to the General Director of the WTO. They exchanged views on the character of a sustainable global economy, on the changes required to achieve such a state of affairs, and the various impediments to doing so. It seemed generally agreed that  unpalatable  (ie costly and risky) policy solutions will now be required if we are to avoid disastrous outcomes.  White finished by suggesting that politicians’ biggest challenge will be to convince ordinary citizens, as well as the rich and powerful, that these needed policy changes are actually are in their own best interests.

https://youtu.be/G0SdFbUWF1s

On September 21, Alex J. Pollock welcomed on behalf of the American Enterprise Institute,Tobias Adrian, Jeffrey Frankel, Desmond Lachman, and William White for a follow-up conversation to their April discussion on the developing disconnect between asset prices and economic fundamentals.  White described the undesirable consequences of past monetary policy by outlining the trend of falling interest rates, accumulating debt, and declining debt quality. He suggested that policy makers have made two grave errors. They did not  appreciate the risks of debt accumulation, financial market distortions and resource misallocations stimulated by repeated cycles of monetary easing. Moreover, they had eased monetary policy inappropriately in the face of positive supply side shocks, largely in the years leading up to the Great Financial Crisis.  We are now in a “debt trap”, worsened by the pandemic,  from which it will be hard to escape.

Links to the conversation and White’s background notes are found below.

https://www.aei.org/events/webinar-a-global-asset-price-bubble-in-a-weak-world-economy/