In a lecture in the Hesburgh Center auditorium Tuesday hosted by the Kellogg Institute, visiting Kellogg fellow Bumba Mukherjee and Notre Dame assistant professor Alexandra Guisinger spoke about their joint research on financial crises in developing countries and the conditions associated with the success of International Monetary Fund (IMF) programs in those countries.Mukherjee said based on the duo’s research, they believe the success of programs suggested by the IMF, which lends money to countries facing economic and financial crisis, is largely dependent upon the financial and political power of non-bank financial institutions — more commonly referred to as “shadow banks.”“As financial globalization has taken off in the last 20, 30 years in the developing world in particular, [shadow banks] are becoming important business actors,” he said.Guisinger said countries turn to the IMF to avoid the possibility of deep economic recession in times of financial and economic distress — specifically when there is danger of a “sudden reversal” or the abrupt decline in the inflow of capital. However, Guisinger said the IMF can complicate the economic situation, bringing in “a new set of actors, a new set of incentives and can interact with this more general pattern of the ebbs and flows of capital.”The standard recommendation of the IMF for a country to avoid a sudden reversal, Mukherjee said, is to impose regulations on shadow banking. He said a problem arises when the shadow banks of a given country are powerful enough to effectively oppose the IMF regulations.“When you have these extremely concentrated, very strong, large, financially powerful shadow banks, that’s precisely when IMF programs won’t work,” Mukherjee said. “If anything, they’ll make things even worse.”Guisinger said the result is the departure of foreign investors and a stock market crash, which can have “cascading effects on the economy and on political conditions.”“Stock market crashes are not trivial,” Mukherjee said. “They have terrible consequences. Investments collapse, the economy collapses, unemployment rates go up, there’s political riots — people respond.”Mukherjee said citizens associate the IMF, and thus the government responsible for asking the IMF to help, with the financial crisis. He said this puts enormous political pressure on government officials, who resort to fraud out of fear for their political careers.“It’s this deadly combination in terms of IMF programs and financial crises that leads to these bad political outcomes,” he said.Mukherjee said his research with Guisinger led him to conclude that the IMF should reform its approach and consider countries on a case by case basis.“The problem here is that the IMF is not really talking to governments who come to them desperately looking for help,” Mukherjee said. “They are coming up with this blueprint without really looking at local conditions, which is not working.”Tags: financial crisis, IMF, International Monetary Fund, Kellogg Institute, NBFI, non-bank financial institutions, Recession, shadow banks
Four-time Olympic champion Mo Farah enjoyed the perfect tune-up ahead of the World Championships with a trademark victory in the 3,000m at the Anniversary Games.The 34-year-old was pushed hard by Spain’s Adel Mechaal, but his final-lap pace proved decisive as he came home in seven minutes 35.15 seconds.Farah will attempt a third successive world 5,000m-10,000m double in August.Elsewhere, Britain’s Laura Muir finished second in the women’s mile.Muir came in behind Kenya’s Olympic silver medallist Hellen Obiri and also missed out on a new British record by six hundredths of a second at the Games, held as part of the Diamond League calendar.Farah puts difficult week behind him Farah once again denied any wrongdoing on Thursday after computer hackers had revealed some of his blood samples had initially been flagged as suspicious. The samples were later cleared on further investigation by governing body the IAAF.Despite a week of difficult questions, Farah was assured of an universally positive welcome at the London Stadium, the scene of his thrilling 2012 Olympic distance double and the venue for next month’s World Championships.While Andrew Butchart kept in range of Farah to finish third in a new Scottish record, the cheers were for the Briton as he held off European indoor champion Mechaal in a season’s best time.”I love London, there’s no place like home. I have to stay focused the next three weeks,” Farah told BBC Sport.”Other things don’t distract me. I’m only in control of my legs. Never will I fail a test. “I run year after year with joy and there’s not much more you can do. I love being on the podium, hearing the anthem and making people proud to be British.”Analysis – ‘Tactical master Farah intimidates rivals’BBC Radio 5 live athletics commentator Mike CostelloMo Farah is still the man to beat over 5,000m and 10,000m at the World Championships, as much because of his aura as anything. The best in any sport tends to intimidate as well as dominate. When his competitors stand on the start line with him, his very presence is enough to frighten them into a loss of form.We’ve seen time and again that tactically he’s a master. If he is not to be victorious at the Worlds, it will be a case where Mo Farah loses rather than somebody else wins. Muir falls short of record but proves pointMuir’s mark of 4:18.03 was half a second outside of Zola Budd’s 32-year-old British mile record, but her display confirmed her return to form and fitness before the World Championships in four weeks’ time.After clocking a 800m personal best in Lausanne on her comeback from a stress fracture in her foot, Muir looked set to add to her five British records, including the 1500m mark set at the Anniversary Games last year, as the field set off at a fierce pace.However, Obiri came through strong in the final 200m to pull away from her rival as Muir’s lack of race sharpness showed. Muir’s hopes of running both the 1500m and 5,000m at the World Championships, which were called into doubt by British Athletics performance director Neil Black last month, now look like being realised.Asher-Smith takes knock to Worlds hopesOlympic 100m champion Elaine Thompson won her contest with world 200m champion Dafne Schippers over the shorter distance, coming home in 10.94 to maintain her unbeaten run in 2017.Britons Asha Philip and Daryll Neita finished sixth and seventh respectively.However, Dina Asher-Smith fell short of the final with time running out for the British record-holder to prove her fitness to the selectors before the World Championships. The 21-year-old suffered a foot fracture earlier this year and ran outdoors for the first time in 2017 last weekend.”Obviously I would have liked to have gone a lot faster, and I would have liked to put a better race together, but I’m happy to have come through it healthy,” she said after her time of 11.51, more than half a second off her personal best.”I’m confident with some more training and some more work in me that things will be on the up.”The British team will be selected on Monday with Philip and Neita assured of their 100m spots.Thompson wins wearing trainers Much of the chat afterwards was about the choice of footwear chosen by Jamaican Thompson as she romped to victory.Although she did not wear conventional running spikes, the 25-year-old said she had to go for a modified form of trainers in the event.”The spikes I have I am not confident with and hurt my Achilles so I am running in flats,” she said.”They have spikes but they are very petite. They are built especially for me and made lighter.”Her performance impressed those on social media.Leo said on Twitter: “Elaine Thompson has just casually mocked the world’s fastest sprinters by winning her 100m in 10.94 into a headwind. WEARING TRAINERS.”James Truscott added: “Elaine Thompson is queen and this is proof of it! Running in trainers at the #AnniversaryGames like it’s some school sports day.”Bosworth turns world beaterBritain’s Tom Bosworth set a new world record in the rarely-raced men’s mile walk, beating the previous 17-year-old mark by five seconds in a winning time of 5:31.08.The 27-year-old, who finished sixth in the 20km at Rio 2016, said that he wanted to produce a special performance to mark race walking’s Diamond League debut.”With about 500m to go I thought ‘is the maths wrong, is that happening?’,” he said.”In athletics, you’ve got to have characters and personality and I think today was a great advert for racewalking.”Hughes makes claim for GB spotDalilah Muhammad, Rio 2016 champion and the fastest women in the world this year, suffered defeat in the 400m hurdles as she struggled to shake off an injury that saw her fail to finish in Lausanne earlier in the week.The American came home in sixth as Jamaica’s Janieve Russell won in 54.02, with Britain’s Eilidh Doyle fourth.Chris O’Hare backed up his victory in last weekend’s British championships with the first Diamond League success of his career, finishing strongly to overtake Kenya’s Vincent Kibet in the home straight and finish in 3:34.75.British champion Nethaneel Mitchell-Blake finished fourth in the 200m behind a trio of Americans led by Ameer Webb.Zharnel Hughes beat Danny Talbot to fifth place to strengthen his claims, in the absence of the injured Adam Gemili, to the third discretionary spot in the British World Championships team.GB heptathlete Katarina Johnson-Thompson came fourth in the long jump with a season’s best leap of 6.75m but finished last in her 100m hurdles heat.British champion Morgan Lake finished seventh in the high jump, with Olympic champion Ruth Beitia also fouling out at 1.90m.Allyson Felix, of the USA, set a new world-leading time for the year with 49.65 in the women’s 400m, while Botswana’s Nijel Amos did the same to win the 800m in 1:43.18.American Kendra Harrison, who set the world record at the meeting last year, won the 100m hurdles in 12.39, but was pushed hard by resurgent Australian Sally Pearson in a season’s best 12.48.Olympic champion Aries Merritt took the 110m hurdles in a season’s best, with Britain’s David Omoregie back in a disappointing eighth. Fellow Rio 2016 gold medallist Kerron Clement beat the British Virgin Islands’ Kyron McMaster, the fastest man in the world this year, in a thrilling finish in the 400m hurdles, winning in 48.02.