On November 7, Jacob Frenkel spoke for “Future is here: Global Leaders on the Changing World” lecture series on “The Global Economy and Policy Challenges”. Dr. Jacob Frenkel is currently the Chairman of JPMorgan Chase International, and also serves as Chairman and CEO of the G-30 Group.
Jacob Frankel shared his insights on global economic growth, monetary policies, interest rate normalization, China’s trade, and long-term challenges of the world economy. While developed economies suffered a setback in the 2008 financial crisis, developing countries have a better growth rate. Developing countries learnt and prepared from previous debt and Asia financial crisis, while developed countries failed to estimate price risks reasonably. When it comes to responding to the crisis, Frankel believes that in addition to traditional measures of lowering interest rate and expanding fiscal deficit, attentions should also be given to unconventional monetary policies, such as purchasing non-performing assets through central banks, which means to increase liquidity of the economic system through quantitative easing measures. In regard to interest rate normalization, he compared and analyzed different stages of Europe and the US from unemployment rate and inflation aspects.
As to China-US trade, Frankel pointed out the importance and efficiency of trade and recognized the importance of China’s trade in the world. He believed that in order to cope with high foreign exchange reserves in China, people should not only rely on exchange rate measures and monetary policies. Attention also needs to be paid to savings rate. He also made analysis on upcoming demographic challenges to economy in both developed and developing countries.
In his dialogue with Zhu Min, Frankel shared his expectation of economic trends and potential challenges in the next decade. He suggested a golden age in the next ten years, and people should be optimistic to face the potential challenges. Frankel said, lessons should be learnt from the 2008 financial crisis, and the institution’s sufficient capital, low leverage, and high liquidity should be guaranteed. He also mentioned that there is limited space for traditional monetary and fiscal policies at the time, where there is a necessity to increase economic flexibility and resilience to cope with future risks. Frankel also shared his professional experiences and gave advices to young students for their career development.
In the end, Zhu Min made his summary that: first, when faced with new problems in a new environment, exploration of new policy tools is core to coping with future challenges; second, emerging markets should be well prepared for spillover effects as the Federal Reserve raises interest rates; lastly, in light of Frankel’s career path, Zhu Min encouraged the audience to equip themselves with an open mind and a down-to-earth attitude to succeed in the future.
“The Future is Here: Global Leaders on the Changing World” Lecture Series is organized by Tsinghua University PBC School of Finance (PBCSF) and National Institute of Financial Research (NIFR), inviting world-renowned leaders and academics to share their views on the frontier trend of world development.
