war ‘ to promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems ’. the collapse of the system of pegged exchange rates in the early 1970s precipitated a lengthy debate between those, led by the french, who favoured a return to managed exchange rates, and others, led by the americans, who favoured floating exchange rates. when a compromise was eventually reached, the fund ’ s articles were amended to allow member countries to choose between fixed, floating or managed exchange rate regimes, as long as they fulfilled certain commitments. members agreed to collaborate with the fund and other countries to assure external stability through ‘ orderly exchange arrangements and … a stable system of exchange rates ’. they also assumed specific obligations relating to their domestic and external policies. they agreed to avoid manipulating exchange rates to prevent effective balance of payments adjustment or to gain an unfair competitive advantage. and they agreed to direct their domestic policies toward fostering orderly economic growth and price stability. the fund ’ s role was also redefined. it was required : first ‘ to oversee the international monetary system in order to ensure its effective operation ’, and second to ‘ exercise firm surveillance over the exchange rate policies of its members and to adopt specific principles for the guidance of all members with respect to these policies ’. these principles were subsequently spelt out in a 1977 surveillance decision, which focussed narrowly on exchange rate policies. surveillance duly became one of the fund ’ s core activities, alongside lending and providing technical assistance. but over the years, the focus of surveillance drifted away from exchange rate issues, as the fund ’ s central role in promoting international monetary cooperation went into eclipse. its public profile was dominated by its frequently controversial role as a provider of financial assistance to countries facing external payments crises. international monetary policy coordination, on the few occasions when it was actively attempted, became the preserve of small inter - governmental groups of leading industrialised countries, the g5 / 7 – most famously in the plaza and louvre accords in the mid 1980s. over time, the international monetary system has evolved into a patchwork of different approaches to policy, in contrast to the uniformity of the bretton woods system. many large developed countries with open capital markets now pursue independent monetary polices and let their exchange rates float freely, while smaller and less developed countries tend to peg or heavily manage their exchange rates, effectively surrendering control over domestic inflation. there are regional monetary unions – notably the euro zone. and some emerging and

. first, there is an important role for a permanent institution as a provider of internationally consistent information, impartial expert analysis, assessment and advice. today ’ s world economy is no longer dominated by a small group of like - minded industrialised countries at similar stages of development ; tomorrow ’ s will be even less so. a shared knowledge base will facilitate effective consultation and collaboration on complex and politically charged issues. this is essentially a public good. and while it is possible to envisage alternative arrangements for supplying it, a permanent international institution is likely to offer clear practical advantages. second, the fund already exists. it has the reach and experience to respond flexibly to the changing structure of the world economy. it has nearly universal membership, ( now totalling 184 sovereign nations ), an agreed legal framework, extensive relevant institutional capacity and a reputation built up over sixty years. given the costs of acquiring such unique capacity from scratch in the modern world, the benefits of starting again would need to be very substantial indeed. this adds up to a strong pragmatic case for working with what we have. so what role should the fund be playing? mervyn king, in his speech in delhi earlier this year, likened the role of the imf to an umpire in cricket, ‘ warning the players not to attack each other verbally and making it clear publicly when they believe the players are not abiding with the spirit of the game ’. while i would be the last person to argue with mervyn, at least about cricket, i initially found this analogy rather unconvincing. in my mind, the term umpire conjures up a portly old gentleman in a white coat and straw boater. surely the modern imf should have a more dynamic and up to date image? but it turns out that even cricket has moved on. i am not referring to the recent abandonment of the england pakistan match, for the first time ever, after a heated disagreement between an umpire and players. no, what i have in mind is the advanced computer technology which i gather now exists, aptly named hawk - eye, which could assist umpires in making the most difficult calls – those about which the players of the game are most likely to disagree. so we should think of the imf as the cricket umpire of the future, with hawk - eye in her toolkit – where the fund ’ s hawk - eye will be its impartial analysis, assessment and advice, enabling it to di