From one point of view markets should know more about what governments are doing in order to avoid bad investment and lending. From another, governments need to know more about what the markets are doing in order to take action and prevent instability. According to a third view the International Monetary Fund should know more about what both markets and governments are doing in order to carry out effective surveillance. Yet, from another view, IMF has to be reformed towards more transparency and democracy in its decisions, consultations and programmes. Certainly the value of information is what you make of it and how you act on it.
Good information is useless if ignored or wrongly interpreted.
The emphasis on the ignorance of lenders about the weaknesses of East Asian borrowers is grossly misplaced and exaggerated. Rather, there was inadequate evaluation of the available data, including that in the periodic reports of the Bank for International Settlements. Again, much of the increase in the external financial exposure to Russia took place during a period when information was widely available on the shortcomings of Russian macroeconomic policy, the weaknesses of its banks, legal and regulatory framework and corporate governance, and when the country was under an IMF programme. The experience thus raises serious questions as to the effectiveness of enhanced transparency in influencing the behaviour of international lenders and investors, or improving multilateral surveillance unless there is a fundamental change in the international approach to finance. Given the degree of integration of financial markets, global surveillance of national policies is essential for the prevention of financial crises.