of these episodes i will mention four : first, be as lucid as possible from the outset. it is always a recipe for additional difficulty to over - assess the gravity of a particular situation and therefore to over - react. but it is equally dangerous to misjudge a particular situation by underestimating its gravity and the risks that are at stake. therefore the quality of the first appreciation, the lucidity of the judgement which is worked out at the beginning is always of the essence. and for this judgement to be as just and pertinent as possible my experience is that you need three ingredients : an excellent analytical preparation, a confrontation of various views within a college of wise persons, and a great deal of experience within that college. particularly in those hectic circumstances that are always complex and multi - dimensional, with a great deal of non - linearities, the textbook solution might not be of great use. experience is of the essence. second, often the lucidity and pertinence of the judgement – and depending on this judgement – is the rapidity of action. in the development of a very complex situation a slight change at the start turns out in very significant discrepancies after a certain period of time and these significant discrepancies can make all the difference between a situation which would be under control and a situation clearly out of control. so time is absolutely of the essence in regaining control of a hectic situation : acting expeditiously is a must. third, whatever the nature of the turbulences, which would hit the global financial system, the multiplicity of entities and parties involved, whether private of public makes it necessary to agree as much as possible ex - ante on the appropriate ways for handling the situation. from that standpoint stress - tests are extremely useful. also useful would be the working out of voluntary “ principles ” stating ex - ante what would be expected from each parties concerned in a difficult situation. this working out of voluntary principles has already been done, as i have already mentioned, in the domain of the private financing of emerging economies. fourth, and finally, let me mention one constant lesson that we have drawn from all previous turbulent episodes : to minimise contagion in all compartments of global finance, whether in the domain of sovereign risks, or in the financial markets of industrialised countries, transparency appears to be the key principle. in hectic times, when fear dominates, absence of transparency foster herd behaviour and ampli

in mexico developed from a local phenomenon into an issue for the international community. and it was certainly not the last one ; the global system had to digest crises in turkey and argentina as well as shocks in the private sector such the stock exchange fall and the bursting of the technology bubble in 2000. but it was the asian crisis that revealed a number of vulnerabilities in national and international financial systems and that led to an enormous reform agenda at the international level. all these crisis episodes that we were confronted with brought to the fore new insights and lessons. they illustrated forcefully the challenges linked to a more globalised world and the increasing importance of private capital flows. i would like to highlight two more general lessons which have remained still important today : first, one about the interlinkages between countries and the implications for the institutional set up. the world has changed dramatically over the past decades. the steady opening up of goods and capital markets has led to the growing integration of countries around the globe. integration is of course a welcome development in itself because more and more countries participate in the global exchange of goods and services and can benefit from the transfer of know how and technologies. as proven by the experience of many economies, including in the eu, trade openness is the best catching up strategy for developing countries. but the contagion effects we have seen from time to time demonstrate the main challenges associated with interdependence. globalisation has put all countries around the globe into one boat. something that happens in one economy is often not just a local event but can have implications for the global system. from this fact it follows that all economies which have a systemic importance should be involved in discussing and participating in the collegial response of the international community as regards issues of global relevance. second, another important lesson from my point of view is the fact that efforts to improve the resilience of the global international system are not a static matter for which one can claim a lasting victory at one point in time. the globalisation and catching up process is far from being completed ; likewise, very rapid technological and financial innovations will continue to be a feature of the modern world for dozens of years to come. thus, trying to ensure the public good of global stability is a constant task that requires continuous scrutiny and effort. each crisis, or episode of significant market correction, is different from the one before. they differ in origin, nature and magnitude. each time new insights are gained about potential root causes of crises –