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ECB opens central bank forum under shadow of Brexit

The European Central Bank on Monday opened the third edition of its annual forum in a secluded luxury resort in Portugal, where the uncertainty and financial market turbulence sparked by Britain’s vote to quit the EU is set to dominate debate.

In his opening speech, ECB chief Mario Draghi expressed “sadness … witnessing change of this magnitude” after 52 percent of Britons voted to leave the EU in the historic Brexit referendum.

For the past three years, the ECB has organised the forum in Sintra, around 25 kilometres (15 miles) from Lisbon, where leading economists, academics, financial market players and central bankers from across the globe are invited to take part in a three-day think-fest.

The forum is seen as Europe’s answer to a gathering in Jackson Hole, Wyoming, organised every year by the US Federal Reserve.

The highlight of the meeting was to have been a round-table discussion on Wednesday with Draghi, Bank of England governor Mark Carney and US Federal Reserve chief Janet Yellen.

But that particular event was cancelled as Draghi would now attend a meeting on the European Council in Brussels on the British referendum result, an ECB spokeswoman told AFP.

This year’s forum, entitled the “future of the international monetary and financial architecture,” is being held following two days of panic selling on the financial markets in the wake of the outcome of the British plebiscite.

Discussions in Sintra are therefore likely to focus on the severe economic and political uncertainty sparked by the vote.

Also likely to be on the agenda will be the repercussions on monetary policy of oil prices, slowing growth in emerging economies and geo-political tensions.

Among the invited speakers are Draghi, as well as members of the ECB’s executive board, the deputy president of the Bundesbank, or German central bank, Claudia Buch, and the chief economist of the Asian Development Bank, Shang-Jin Wei.

Academics from prestigious institutions such as the universities of Berkeley and Princeton in the United States and Oxford in Britain will also attend.

Representing the International Monetary Fund will be its research chief Maurice Obstfeld.