Such practices may be misleading in judging the compliance with regulation. However these efforts may reduce risks but could be insufficient to avoid financial crises. Therefore, ways should be designed to involve more effectively the private sector in crisis resolution (the “burden-sharing” issue). In the wake of the Mexican crisis, the G10 Finance Ministers and Central Bank Governors endorsed the recommendation of the Group of Ten Report on “The Resolution of Sovereign Liquidity Crises” to introduce in sovereign bond contracts collective action clauses. The G7 endorsed this recommendation. Efforts undertaken recently by the G10 Deputies to design concrete steps to implement this proposal should also be supported. Another way to promote private sector implication is the voluntary roll-over or restructuring of short-term debt coming to maturity. The Korean experience has been replicated, yet in different conditions, with success in the case of Brazil. Such a solution worked well after the Brazilian authorities committed firmly to, and implemented, fiscal adjustment. The use of financial innovative techniques should also be considered: for instance, the introduction of roll-over options in debt contract (Buiter proposal) or put options associated with significant debt reduction. 3  BIS Review 81/1999  As to the role of the international community: The IMF has a central role to play in macroeconomic surveillance which is its main mission. The conditionality associated with financial assistance is essential to give economic agents a clear assessment of the efforts made by Members committed to implement adjustment programmes. Furthermore, the IMF can improve its action as regards prevention.

We have the recent case against BNPP for its conduct in evading U.S. sanctions related to Iran, Sudan and Cuba. The case is noteworthy because the disposition involved pleas to Federal and state criminal violations, and a record fine of nearly $ billion. The BNPP case is not the only case against a financial institution for economic sanctions violations. There have been a series of others. Every one of this series of cases concerns a foreign bank. Observers ask, “why are all of these economic sanctions cases against foreign banks?” Before offering my answer, let me start with some “not’s”. In my view, it is not that U.S. financial institutions are so much more compliant than foreign institutions. I will avoid an ugly name-and-shame ritual, where I would identify the U.S. financial institutions that violated U.S. law. It is not that U.S. prosecutors are xenophobic individuals who are bound and determined to target only foreign institutions. I know from personal knowledge that prosecutors have followed the evidence and it has led them to the doors of foreign banks only. What explains this phenomenon? Some foreign institutions, unlike their American counterparts, did not see the values that motivate and support U.S. economic sanctions rules. At most U.S. financial institutions, and I may be myopic in seeing too much nobility in them, there is a widely accepted understanding that our U.S. sanctions are tailored to accomplish a laudable public purpose. The Sudanese sanctions are designed to coerce a regime to cease certain horrific practices, like genocide.