Specifically, we call for the creation of an International Monetary Policy Committee composed of representatives of major central banks that will report regularly to world leaders on the aggregate consequences of individual central bank policies.”  6  Ferrero, Gertler, and Svensson (2009) provide a suitable model for such thought experiments, a New Keynesian DSGE model of a world with two large countries and tradable and nontradable goods. BIS central bankers’ speeches  7  foreign economy. Everything else equal, this has two consequences for the domestic economy. First, due to increased foreign activity, foreign demand for domestic exports increases somewhat. Second, the interest-rate differential between the domestic and foreign interest rates increases. This will trigger an incipient capital inflow into the domestic economy and appreciation of the domestic currency. Suppose the appreciation is so large as to trigger depreciation expectations that balance the increased interest-rate differential. This will again stabilise the capital flow at zero. Everything else equal, the appreciation of the currency is a real appreciation, which is contractionary for the tradable-goods sector. Assume that this contractionary effect dominates over the initial increase in export demand, so the net effect on the tradable-goods sector is contractionary. Demand for, and the output of, nontradable goods may expand somewhat from the appreciation, but assume that the contraction of the tradable-goods sector dominates so the net effect on domestic output is a contraction. The appreciation also leads to lower inflation, through lower prices on imported goods.

In addition, banking institutions and their staff need to reflect, in their public relations, the highest standards of security, communication and transparency, care and support so that this relationship of trust and confidence becomes a characteristic of mutual developments. The supervisory regulatory framework is being completed with a view to take these developments even further.   Banking supervisors, in turn, need to pay more attention to examinations and reports they prepare, integrity and behaviour that characterises the work of each bank.   Another great lesson we may draw from the crisis is to avoid at any cost huge concentrations and dependency on short-term financial funds. A top priority remains the adoption of prudent practices on risk management.   Composition and capacities of banks managing structures is another challenge for the banking industry in the future. The last crisis showed that in many cases, board members represented only short-term interests of shareholders, at the expense of other interests of the group. Likewise, their expertise and knowledge should be closely connected to specific activities of the bank.   The market and innovation move faster than the supervisor does. Therefore, any innovation or new banking product, prior to being marketed, needs to be tested responsibly, assessing carefully all potential accompanying risks. In a more national context, it is necessary and actually completely possible for the banking sector to accelerate the process of crediting revitalisation, a development that supports not only the economy and the clients, but also the banks.