The policy brief covers discussions on managing supply-side shocks, highlighting challenges for monetary policy and financial resilience due to geopolitical tensions, climate change, and fiscal constraints, requiring coordinated policies.
Introduction to the Roundtable Discussion
In June 2026, a significant roundtable discussion on “Governing Supply-side Shocks – Central Bank Instruments and Financial Resilience” was held collaboratively by AMRO, the Council on Economic Policies (CEP), and the South East Asian Central Banks (SEACEN) Research and Training Centre. This policy brief aims to synthesize the key conversations that took place during the event. Amidst an evolving economic landscape marked by novel supply-side shocks, the meeting underscored the pressing need to address these phenomena. Particularly, it focused on how geopolitical tensions, demographic changes, energy shortages, climate change, and natural disasters increasingly challenge monetary frameworks, fiscal stability, and financial resilience across the globe.
Navigating Complex Economic Challenges
A primary takeaway from the roundtable is the complex challenges that central banks face due to the rising frequency and intensity of these supply-side shocks. Balancing inflation control with sustaining economic growth and investment becomes notably more challenging in this context. The discussions highlighted that diminishing fiscal space and increased financial vulnerabilities limit policy effectiveness.
These conditions are exacerbated by the expansion of non-bank financial intermediaries and rapid technological advancements, complicating traditional monetary transmission. Addressing these multifaceted challenges demands a policy approach that integrates monetary and fiscal coordination, enhances financial supervision, and implements targeted interventions. Such measures are critical to maintaining price stability, safeguarding vulnerable populations, and mitigating adverse effects on crucial sectors.
Contributors and Acknowledgments
This insightful policy brief was a collaborative effort, meticulously prepared by a team of experts. Julia Bingler, a Senior Fellow at CEP, contributed her expertise alongside Laura Britt Fermo, Senior Economist at AMRO, and Ashutosh Jaiswal, Senior Financial Sector Specialist at SEACEN. Their combined experience and knowledge provided an in-depth analysis of the discussed themes, emphasizing the importance of adapting to current economic challenges with a nuanced policy framework. This document reflects their collective understanding and offers valuable recommendations to navigate the complex landscape of contemporary economic governance in the face of supply-side shocks.
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