account and if programmes are so detailed that the country in question no longer has any freedom of action. in that respect, the imf was on the wrong path. things are changing at present, however. i fully support the strategy of focusing in future more on the objectives of securing the borrowing country's ownership and of dispensing with detailed requirements for implementation ( technical assistance should continue however ). but let us not deceive ourselves : the freedom of a patient is limited in any case. it may become even smaller, if the imf keeps out completely. the constraints of the facts may be overwhelming. diseases are likely to take their toll. on the other hand, there is certainly a realistic chance that healing powers are at work. these powers, however, have to be actively supported by the patient ( with or without the imf ). ix much has been done with regard to “ private sector involvement ” ( psi ). but we have not yet arrived at final conclusions. sometimes it seems that this is only a matter of crisis solution. in fact, however, it is not. it is, in my view, predominantly a matter of crisis prevention. that is because the manner of operating in the event of crisis has a crucial influence on expectations. these, in turn, determine the actions of investors at a very early stage and thus the scale of the risks and of susceptibility to crisis. short - term financial assistance from the imf in the event of crisis may be essential, both for the countries directly affected and, as a result of contagion, for the rest of the world. a regular bail - out of the private sector, however, is likely to be counter - productive : · it may have a detrimental effect on the risk - awareness of private investors and obscure the optimal allocation of resources ; · large - scale financial packages may support unsustainable exchange rates ; · large - scale financing by the imf brings about financial burdens that cannot be covered by the fund ’ s resources ; · and, last but not least, endless financing may encourage resistance to the implementation of reforms. my conclusion at this point : the role of the imf should be predominantly a catalytic one. for that purpose, the fund ’ s main instruments should be convincing advice and programmes, not money. priority has to be given to the private market participants. the leitmotif of the fund has to be “ bail - in ”, not “ bail - out

instance, may be counter - productive in the longer - run. · last but not least, i sometimes have the feeling that we do not have a lack of information but an abundance. in fact, staffs have to spend some time in sorting out useful from useless information ( and sometimes produce new papers with even more information ). vii on “ standards and codes ” in general : this is a complicated matter. on the one hand, it is probably correct to say that the recent currency crises were due, at least in part, to careless or " immature " patterns of behaviour. in that respect, standards and codes set criteria and require the countries to " behave correctly ". the basic idea of drawing up " rules " and of thus making the interaction on the internationally linked markets easier, predictable and perhaps also more " just ", is surely not wrong either. i give my full support to such rules if they serve the efficiency of the markets ( for instance : eliminating corruption and combating money laundering ). on the other hand, there are problems which might hamper the desired success : · there are now more than 60 standards and codes. over 10, 000 assessments would have to be prepared in order to monitor them for all 183 imf countries. this simply cannot be managed. besides, the cost would be out of all reasonable proportion to the benefit. · not all standards and codes have a relation to economics. for that reason, too, priorities have to be set. · furthermore, there is not always a compelling reason for everything having to be done in accordance with one given standard. is that really an indispensable precondition for the markets to function efficiently? · it is also difficult to answer the question of whether there really have to be rules that may well enhance efficiency but perhaps ignore cultural diversity as well. thus, my conclusion at this point is : we have to be careful, we should not carry things too far, and not at all costs. viii after “ standards and codes ”, the logical next topic is “ conditionality and ownership ”. as we all know, the imf has always been subject to criticism that it sets conditions for its lending that are too demanding, that it " imposes " its programmes, even that it puts a " gag " on the borrowing countries and restricts their sovereignty. some of that criticism is justified. it is, in fact, counterproductive if the borrowing country is not sufficiently involved, if its priorities are not taken into