As I recently remarked1, the pillars acting as a basis for  1  See the opening address “Global imbalances and capital flows in the era of new technologies”, at the conference bearing the same name organised by the Banco de España and the Reinventing Bretton Woods Committee. Available at https://www.bde.es/f/webbde/GAP/Secciones/SalaPrensa/IntervencionesPublicas/Gobernador/Arc/Fic/hdc100919.pdf. 2  fundamental institutions for the global economy such as the WTO and the IMF were complemented by certain mechanisms and procedures. The aim thereby was to ensure they fulfilled their mission and to resolve potential conflicts on the basis of the principles of justice and equity for all the participating States. Such arrangements have, for decades, enabled the containment of certain unilateral actions. From my standpoint, and taking stock, the liberalisation of trade and financial exchanges in recent decades under these institutions has made, and continues to make, a net positive contribution to global growth. This has, moreover, helped improve substantially the opportunities for development, especially in the poorest countries, drastically reducing inequality and extreme poverty globally, at least at a pace never previously seen. Accordingly, these principles and institutions are, for me, as necessary today as they were then. However, the world has seen far-reaching change in the past 75 years. Currently, the setting of rapid transformation means some adjustments are needed to update international economic governance. Specifically, one of the key challenges at present is to improve the adaptation of the multilateral rules-based system in force since the Bretton Woods Agreements to the current circumstances and to future challenges.

Tarisa Watanagase: Dealing with volatile capital flows Welcome address by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the 42nd SEACEN Governors’ Conference, Bangkok, 28 July 2007. *  *  *  Your Excellency Minister of Finance, Mr. Rodrigo de Rato, Mr. Hervé Hannoun, Fellow Governors, Distinguished Guests, Ladies and Gentlemen, I would like to begin by extending a very warm welcome to all of you to Bangkok. We are pleased to host the 42nd SEACEN Governors’ Conference and the 26th Meeting of SEACEN Board of Governors here in Bangkok. I would also like to express my sincere appreciation to His Excellency Chalongphob Sussangkarn, Finance Minister of Thailand, for his presence here to officially open the Conference. This year’s theme on “Living with Volatilities: Is SEACEN prepared for Rising Fluctuations in Exchange Rate and Capital Flows?” comes at an opportune moment, given a recent volatile and uncertain market conditions. This volatility has posed challenges to central banks in maintaining monetary and financial stability. Let me share with you some of my views on this very important issue. It is traditionally believed that emerging markets are subject to more volatile capital flows than developed countries due to underdevelopment of our financial markets and weak institutions. Thus, putting in place a more flexible exchange rate policy, credible monetary policy and sound domestic financial system could help emerging markets reduce the volatility of capital flows as well as its negative effect on the economic stability.