##sable and resolute action. after having set up the previous two lines of defence, a third step is now needed in order to improve very significantly medium and long - term confidence. in this context, the credibility of the reforms to improve resilience of the global financial system as well as the stability of the global economy is of the essence. we will see the benefits of the reforms not only in a longterm perspective, but already today, because confidence today, and therefore the success of the decisions already taken by central banks and governments, depends on the quality and credibility of the ambitious reform exercise that has started a few months ago and that is presently deepening with the recent and future meetings of the g20. in my remarks i have concentrated on the financial aspects of the turmoil, which are very much in the domain of the financial stability forum. the financial stability forum, whose task is to elaborate international supervisory and regulatory policies and standards, has drawn the first set of lessons from the turmoil along the lines i have described above. deepening its work and implementing it is now of the essence to establish an appropriate and effective reform of the global financial system. the imf participates in this work and provides relevant inputs as a member of the fsf. there is also a very important role for the imf itself in its assessment of macro - financial risks and systemic vulnerabilities, and in its surveillance of macroeconomic policies. credible stability in the long run requires macroeconomic policies that have a medium - term orientation and are stability - oriented. pro - cyclicality can stem not only from unsatisfactory regulatory policies in the financial sphere, but also from macroeconomic policies, where it is equally undesirable. in a global context, there is hence a need to significantly strengthen imf surveillance over economies that are systemically relevant. the imf ’ s multilateral consultation with key partners is a process that can be built upon in this context. in a longterm perspective, greater discipline in the global economy is needed to foster stability and help balance short - term and long - term prosperity more appropriately. thank you for your attention.

in productivity. on the labour market, the priority must be to enhance wage flexibility and incentives to work, and to remove labour market rigidities. finally, the governing council is of the view that the package of six legislative proposals on economic governance, adopted by the european council at its summit on 24 – 25 march 2011, goes some way to improving economic and budgetary surveillance in the euro area. however, in our view, the proposals fall short of the necessary quantum leap in the surveillance of the euro area which is needed to ensure the smooth functioning of economic and monetary union. therefore, the governing council, in line with the ecb ’ s opinion of 17 february 2011 on these proposals, urges the ecofin council, the european parliament and the commission to agree, in the context of their “ trialogue ”, on more stringent requirements, more automaticity in the procedures and a clearer focus on the most vulnerable countries with losses in competitiveness. all this would help to ensure that the new framework is effective in the long run. bis central bankers ’ speeches