Secondly, comprehensive preparations needed to better counter shocks. This includes multilateral surveillance that provides better insights on the increasing interconnectedness, through exposures of banks and corporates. For the East Asian region, the ASEAN+3 Macroeconomic Research Office (AMRO) serves as a regional surveillance unit to enhance its members’ macro-monitoring systems. And to the global extent, the International Monetary Fund (IMF) has introduced the early warning exercise and cluster surveillance aiming at strengthening a country’s capability to monitor tail-risks at a more systemic and regional level. And thirdly, swift and effective resolution including multi-layered liquidity provision. The deepest layer within starts from the ASEAN Swap Arrangement (ASA), followed by the Chiang Mai Initiative’s Multilateralization (CMIM), and the liquidity provision from the IMF. Not only will it provide safeguard for members, coordination under these collective actions will also offer good will for global investors and enable them to quickly revive confidence, should any shock occurs in the financial markets. Final thoughts Ladies and gentlemen, keeping our houses in order is the policymakers’ usual business. While economic and financial interconnectedness has become more sophisticated, strengthening international coordination would be pivotal to success. This requires  BIS central bankers’ speeches  3  extra effort in building stronger fences for global economic community to effectively handle any unwanted shocks and new generation of crisis in the periods ahead. Last but not least, I am confident that with knowledge and experiences sharing among us, we will be a step closer to improve our role in promoting economic and financial stability.

Even controversial issues that were long blocking international negotiations, as the Doha agenda, received a new momentum in the G20 communiqué. So far, as you all know, significant progress has been achieved in terms of recognition of the causes of the crises, including development of unsound risk management practices and excessive leverage, in a time regulators in many jurisdictions failed to perceive the build up of unbalances in individual institutions and financial markets in general. At the same time, each country in one way or another has taken actions to provide liquidity and unfreeze credit markets, and when necessary – particularly in mature economies – to stimulate the economy, strengthen the capital basis of financial institutions and tackle regulatory deficiencies. That said, authorities in Washington committed to implement reforms that will strengthen financial markets and regulatory regimes. An important novelty is the recognition that financial markets are global in scope, so that enhanced international cooperation among regulators is needed in a globalized world. Commitment to reform the multilateral institutions to increase their legitimacy and effectiveness has also progressed, granting a larger weight in their decision bodies to emerging economies, as well as expanding the representativeness of the Financial Stability Forum and of the Basel Committee on Banking Supervision. The IMF and the expanded Financial Stability Forum are called to increase efforts in crisis prevention and responses.