a gold anchor disappeared when the convertibility of the usd into gold came to end, the new international monetary system remained based on the usd. this dollar - based system gradually incorporated greater exchange rate flexibility. it allowed for a boom in trade and capital flows. in this context, the idea of a global currency did not prosper in the academic debates – and even less so in policy discussions. one recent exception stands out, to which i would like to pay a special tribute. in 2010, michel camdessus launched the palais royal initiative. this initiative sheds light on the shortcomings of the international financial system, in particular its global governance and an overreliance on a single central currency. the initiative suggested a greater role for sdrs and enhanced cooperation between the world bank, the imf and the g20. however, other major projects have in parallel been assigned higher priority for instance the successful creation and development of the euro - or have been dictated by necessity - for instance the strengthening of the global financial safety net ( gfsn ) induced by the great financial crisis and then the covid crisis. that said, there have been significant progress such as the increase of imf resources, the two special drawing rights ( sdr ) allocations ( including the last one of 650 billion usd in 2021 ) and the creation of the resilience and sustainability trust ( rst ) on the 1st of may by the imf, which will help deliver the g20 commitment to rechannelling at least 100 billion usd of this allocation to the countries in need. 2. the dangers of a fragmented financial system but there are dangers ahead. we have to avoid shifting from a dollar - dominated system to a confrontational non - system with, for instance, a dollar world opposed to a renminbi world. we can all agree that such a fragmentation would page 3 sur 7 generate instability, notably creating the risk of runs from one currency to another. iii competitive currency devaluations between the two world wars created such instability, when the dollar and the pound were competing for leadership. fragmentation might also lead to the development of separated payment systems with limited interoperability. and it could harm the gfsn ( as reserves could be less convertible ) with, consequently, a misallocation of capital. another current concern is china ’ s reluctance to join the international community cooperative debt treatment process, the common framework. finally, we all hope that the sanctions and other measures taken in an emergency situation

reaching structural changes have taken place in credit and capital markets, with hedge funds playing a major role in the process. it's fair to say, for instance, that credit derivatives would not have expanded at the same pace and with so high innovation without strong hedge funds involvement. what do those evolutions mean for the future? financial innovation is good and healthy for our economies. changes that have occurred in the last years strongly contribute to market efficiency and overall increase the resilience of our financial system. by allowing wider spreading of risk through credit derivatives, in particular, hedge funds bring an important contribution to market efficiency and liquidity. at the same time, the implications of those changes for financial market dynamics might be more complex and far reaching than before. new instruments have been developed in a very benign environment. liquidity in many market segments has not been tested in period of stress. how these instruments would behave in periods of stress is a major question for market participants and authorities alike. in such an uncertain environment, securing the full benefits of the structural shifts in the financial system does put a premium on risk management. everybody would agree, i think, that the first mitigant against the risks associated with hedge funds is robust internal risk management systems, both in hedge funds themselves and at their prime brokers. these are the basis for an efficient market discipline and a condition for financial stability. strong and rigorous implementation of sound principles for risk management seem essential. you have noticed the reference, in yesterday's g7 communique, to the paulson's task force ( presidents working group ). beyond that, there may be some additional questions to consider which, for the sake of argument and in order to launch the debate, i will put on the table rather in a provocative mode, but are dealt with in more detail and balance in my own ( and some other ) contributions to the review. first question : what are the conditions to ensure an appropriate level of investor protection, and in particular, what are the consequences of the increased " retailization " of hedge funds? a second question is the future of the hedge fund industry. it is the nature of technological progress to spread in a way that the profits it creates to be competed away. replicating hedge funds strategies – at lower costs – seems to be expanding. m. hsieh will tell you more about it during the panel discussion. a third and important issue relates to the evolving relationship between banks and hedge funds. this relation is complex