The world needs fresh economic thinking and new ways of governing the global financial system, according to a top monetary official in one of the developing nations that has been hammered by the current economic crisis.
“We have a system for the time we no longer live in,” said Charles Chukwuma Soludo, governor of the Central Bank of Nigeria, during an appearance on Oct. 14 at Fordham College at Rose Hill.
His talk was part of a Distinguished Lecture Series hosted by Fordham’s Center for International Policy Studies. John Nash, Nobel Prize-winning economist and one of the founders of game theory, also spoke.
The topic, “Current Issues in Financial Markets,” drew an overflow, standing-room-only crowd to the Flom Auditorium at Walsh Library. Dozens of students followed the lecture on video monitors outside.
Soludo said the need for a new international order, with new safeguards, is shown by the current plight of Nigeria and other developing countries.
Thailand and Kenya, for instance, strengthened their economies by following the received wisdom that they should live within their means and control inflation, he said. Nigeria embarked on an ambitions recapitalization of its banks, and by March it had 12 banks among the top 1,000 in the world, with six in the top 400, he said. But despite their efforts, all three countries have been hit hard by the recent credit crisis.
Crises are coming about every 10 years, with the last one coming with the East Asian financial crisis of 1997, he said.
“It raises a fundamental question about the nature of the global financial architecture that we have today,” he said.
“Where are we?” he asked. “Is it time to think anew?”
Soludo said nationalizing banks has shown to bring its own problems: “Once government is in, politics will obviously be in. You cannot have government and divorce politics from it,” he said.
He was introduced by Dominick Salvatore, Ph.D., chairman of the Fordham economics department, who said the crisis calls for better, more comprehensive financial regulation, along with less exotic financial instruments and more transparency.
“The long-term solution to the problem is, in fact, to live within our means,” he said.
Before the lecture, Soludo met with faculty and University officials to discuss research collaborations between Fordham and the Nigerian government. Salvatore attended, along with John Tognino, chairman of the Fordham University Board of Trustees.