Against this background, this calls into question whether the surveillance mechanisms available at the moment and the role played by emerging markets in international cooperation are adequate in ensuring international financial stability, the essence of the mission of IFIs. It is therefore in times of crisis that the value of the international cooperation be measured and the voice and representation of emerging markets be heard IFIs. The unprecedented events of the past months present a historic opportunity for the international bodies to rise to the challenge. The time has come for them to be more proactive and become truly global institutions. Apart from strengthening the roles of IFIs, I believe that regional cooperation can play an important role in supplementing both national and global responses. I’d like to raise two observations on this issue. First, the global financial crisis highlights the need to put in place an effective regional surveillance mechanism that can detect weakness early on. International financial institutions will remain useful for global surveillance and financing balance of payments need when necessary. However, waiting for the global community  2  BIS Review 163/2008  through international financial institutions for regional surveillance may be too little too late for timely policy measures that can safeguard the region from contagion from other parts of the world. Indeed, it is very important for policymakers with common challenges to put greater efforts in having a clear and in depth understanding of one another’s policy and practices.

Tarisa Watanagase: Combating the global financial crisis – role of international cooperation Remarks by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the HKMA Distinguished Lecture, Hong Kong, 16 December 2008. *  *  *  Governor Draghi, Governor Yam, Distinguished Guests, Ladies and Gentlemen, I am honored and delighted to be here among this gathering of distinguished policymakers, financial experts and academia, at this year’s HKMA Distinguished Lecture and would like to thank Governor Yam for the kind invitation. This lecture truly provides an excellent opportunity for us to share our views on the topical issues that are at the center of international financial community. Ten years ago, we had the Asian financial crisis. In Thailand, there were plenty of discussions about the causes and remedies of the crisis, some of which still continued until these days. To me, the Thai crisis had 4 main causes, namely, we had weaknesses in the macroeconomic management leading up to bubbles, lax supervision, excessive risk taking of both the financial sector and the private sector in general, and the inadequate legal and information infrastructure. The crisis we are facing now has many surprises as pointed out by Governor Draghi, but I also see plenty of similarities in the underlying root causes. Because of the crisis’s global scale and its severity, this time around we have seen unprecedented efforts taking at both the national, regional and international levels. Today, one decade after the Asian financial crisis, emerging markets look less vulnerable to financial disturbances.