legitimacy and effectiveness has also progressed, granting a larger weight in their decision bodies to emerging economies, as well as expanding the representativeness of the financial stability forum and of the basel committee on banking supervision. the imf and the expanded financial stability forum are called to increase efforts in crisis prevention and responses. the g20 communique backed the calls for a broader international cooperation in several fronts, but let me remind you that the international community of central bankers and financial regulators have already developed strong cooperation ties. institutions as the bis with its regular meetings or governors and of senior central bank officials and experts or forums like the basel committees and the financial stability forum have been providing for years the necessary dialogue, exchange of ideas and information between us. i understand that other forums of economic authorities can replicate our own model of cooperation. regarding the imf, the discussion currently concentrates around its role and legitimacy. its role should focus on three main topics. the first is surveillance. it is very important that the imf becomes a key and integral part of the financial early warning system. the imf is vital not only in terms of forecasting, which is already regularly performed and published, but also in terms of surveillance of each country ’ s policies and specific warning indicators, aimed at detecting its growing unbalances. one of the points that, in my personal opinion, have complicated efforts to deal with the current financial crisis is that the whole focus of the imf during decades was to prevent crises in emerging markets. there is a different picture now, and is paramount that the surveillance done by the imf focus on every relevant economy and really works as an early warning system. the second topic, evidently, is international cooperation. and international cooperation requires that the imf and the financial stability forum work together to propose a new set of regulations – some of them were already discussed here today, and particularly regulation and supervision of cross - border transactions, which are not directly restricted to one national supervisory authority. the basel committee will most likely continue to be the focal point of conducting the implementation of the process. the third topic is the imf role in supporting emerging and developing countries, which have no financial conditions to address the effects of the financial turmoil on their economies. traditionally, the imf has focused on crisis generated in one specific economy or group of economies and in proposing policies to restore that country ’ s soundness. the problem that we are facing today is that some countries might have a sound policy but were affected by the

global systemic crisis. how to react to that? if the crisis is “ imported ” and the country cannot meet its financing needs, the imf should provide liquidity and contribute to any kind of anti - cyclical adjustment. in that regard, the authorities of leading economies should usefully consider to allow the imf to issue bonds. in a moment of de - leveraging, when we are talking about re - leveraging, a leveraged imf would have increased ability to meet its rising challenges. in regard to the world bank, it should focus on poor countries, the ones that not only require liquidity or loans, but effectively need financial support. and for both the imf and the world bank, a critical question today is legitimacy. and the way emerging market economies are playing a more important role in the global economy – not only they are representing a larger share of world output as compared to before, but also represent at this point a solution for the crisis – it is imperative that these countries have a proportional weight in the governance structure of the two bretton woods institutions. another fundamental development these days is the increasing role played by the g20, for the very same reason of the growing participation of emerging markets economies in global output. it is clear today that the g7 alone or even the g10 are not able to address all relevant issues that affect the world economy, which are better dealt by a larger group as the g20. evidently there is always a trade - off, the larger the group, the more difficult its effectiveness. but that is a challenge that we have to face. the first meeting of heads of states of the g20 was an essential step towards making the g20 a more effective decision - making forum. the next topic is a global supervisory authority. the g20 suggested the creation of a college of supervisors, following a financial stability forum recommendation. president kohler raised here the idea of having the imf playing this role. we are in the very preliminary phase of this discussion and many challenges lay ahead in that regard, particularly deciding what should be subject to international supervision and what should be subject to national or regional supervisory entities. much of the discussion today evolves around crisis prevention. in terms of crisis resolution, the recommendation is for every country to take all the necessary actions to restore the regular working of its financial system, consumer and investor confidence and the level of economic activity. but every country must act according to its needs and resources. countries were financial institutions faced