lending if they do not have adequate information in accessible form, so that we need to provide appropriate incentives for countries to provide such information. the corollary is that where they do have adequate information, financial market participants can be expected to accept the penalty if their judgements prove ill - founded - as indeed they largely do already in respect of many forms of overseas investment. the second condition for more stable capital flows is stronger financial systems. that includes for example the broadening of capital markets so that the allocation of capital is less concentrated on local banking systems. it includes robust financial infrastructure - for example payments and settlements systems. and it includes crucially more effective financial regulation and supervision. a key feature of future arrangements for me in this area is the encouragement, not just of more published information about the short - term foreign currency assets, relative to liabilities, of the public sector and the banking system, but more positive management of the country ’ s foreign currency liquidity position, taking account of the nature of the exchange rate regime. it was weaknesses in this area, above all, in my view that turned the asian financial problem into a panic. these various steps - which need a great deal of elaboration and refinement - in themselves represent a huge agenda for the future. but however much we try to prevent accidents we need nevertheless to be prepared for them to happen. the third condition for living with freedom of capital movements, therefore, is a more consistent view of how, when a crisis does break, the burden might be expected to be shared in future between official and private sector financing. in this context, one thing seems clear : given the evidence of public resistance, we cannot assume that massive official financing packages will in fact be deliverable in the future to bail out private foreign currency creditors. various ideas have been put forward for involving private foreign currency lenders in an extension of maturities in case of a serious foreign exchange crisis perhaps within a framework of insolvency principles or some other form of code of practice. these ideas, too, need to be developed and refined ; and we need to establish suitable incentives and conditions to ensure that the financing burden is in fact shared between official and private sector creditors. the general point here is that it may help to discourage excessive, potentially volatile, short - term foreign currency lending in future if the lenders clearly understand from the outset that they will indeed be expected to carry a substantial part of the load. mr chairman, the debate on all

these issues is still at a relatively early stage, and is being carried forward seemingly whenever two or more monetary officials, or indeed private sector analysts or commentators, are gathered together in one place. it is a key part of the present international monetary agenda, and as the debate crystallises into policy consensus, it will become an important element in the environment in which you take your decisions on investment in the emerging markets. i have no doubt that massive capital flows to the emerging markets will be a continuing feature of the financial landscape - it is in the long - term interests of the recipient countries, the investing community, and the world economy that they should. the task is to try to introduce greater stability into the process.