The Third Roundtable with the Government of Serbia
Illiquidity: The Real Problem or a Convenient Excuse?
On October 8, the Third Roundtable with the Government of Serbia and CIPE with the topic: "Illiquidity - Actual Problem or a Good Excuse?" was organized in Belgrade, in hotel Hyatt.
The panelists were: Mirko Cvetković, Prime Minister; Radovan Jelašić, Governor of the National Bank of Serbia; Slobodan Vučićević, President of SAM and Droga Kolinska company; Draginja Đurić, SAM Board member and President of the Executive Board of Banca Intesa; Vladimir Čupić, SAM Board member and President of the Hypo Alpe Adria Bank, and Dragoljub Vukadinović, President of the company Metalac. Moderator was Boris Begović, President of CLDS and professor at the Faculty of Law in Belgrade.
As it was emphasized during the Roundtable, primary motive for selection of this topic was the fact that illiquidity in Serbia was traditionally perceived as a consequence of the global economic crisis and the impact of the recession on the domestic economy, without further looking for other possible causes behind it. Bringing together the Prime Minister, Governor, bankers and business representatives at the same table, SAM aimed to explore other likely problems and origins of illiquidity in Serbian economy.
Some of the questions raised by moderator during the roundtable discussion with the panelists were:
- Should the global financial crisis and recession be blamed for everything?
- How vulnerable is the economy of Serbia and is there anything that can be changed?
- The origin of illiquidity - macroeconomic policies or microeconomic inefficiency?
- Comprehending illiquidity - autonomous problem or the "illness" indicator?
- Sources of illiquidity - Government as (major) debtor?
- Domestic banking sector - Guardian of (its own) liquidity?
- Borrowing risks and its sources - why are the interest rates so high?
- Bankruptcy Legislation and its implementation - what options are left to the creditors?
- Debt-for-equity swap - what are the potential achievements, if it is feasible by any means?
- The end of global recession - automatic resolution of the illiquidity problem?
- "Never miss a good crisis" - have we missed this one too?
The discussion on illiquidity problem revealed that it is above all a consequence of major weaknesses of the Serbian economy. The current financial crisis should be used as an inducement to conduct reforms which will bring about the possibility to overcome the weaknesses. One of the reforms is tied to the entire payment system, while the other entails a comprehensive reform of the public sector in order to decrease its costs and boost its efficiency.
More than 150 people attended the roundtable. Beside SAM members, others were from international community, Serbian government representatives, the National bank of Serbia, representatives from other business associations, business representatives, commercial banks and NGO community. The Roundtable was excellently covered by almost all print and electronic media in Serbia.