It is widely agreed that there are four areas where reforms would help to improve the functioning of the international monetary system. As already mentioned, the emerging market countries need to strengthen practices and standards in both the financial and nonfinancial corporate sectors. As one step to encourage these countries to adopt the recommended measures, the international community is placing particular emphasis on the development and implementation of international standards and principles. In the banking area, the Basle Committee on Banking Supervision has developed the Core Principles for Effective Banking Supervision , which serves as the basic reference and minimum standard for supervisory authorities, while the IMF has developed a framework for financial sector surveillance to guide the identification of potential areas of vulnerability. The Basle Committee will no doubt continue to be responsible for formulating banking standards, and the IMF's primary role will be to help monitor their adoption and implementation.
International standards exist or are being developed in other areas as well.
Regional and multilateral initiatives to harmonize domestic bankruptcy laws have not been successful, as domestic bankruptcy systems vary considerably across countries due to differences in legal traditions and practices. However, some progress in reforming bankruptcy legislation in individual countries has been made in the context of IMF and World Bank lending programs. A similar code with respect to monetary and financial policies is also being developed, in consultation with central banks and multilateral financial supervisory authorities. Considerable efforts are also underway to improve the provision of economic and financial data to the public by emerging market countries. The third broad way in which the IFIs can contribute to reducing the risk and costs of financial crises is by strengthening the process of surveillance.