contra - cyclical. in this regard and especially in the light of the profits announced by the major banking groups and the large payouts to traders, ceos or shareholders in the form of dividends, i would like to stress that these profits should primarily be used to bolster capital ratios and allow banks to focus on their core task of financing the economy. all in all, i praise international standards in the field of prudential rules. the ones already developed over many years and which the crisis is now leading us to adapt, or the new ones under scrutiny, are only meaningful and will only produce their desired effects if they are applied by all countries and, needless to say, first of all by those that negotiated them. from that viewpoint, the adoption of the basel ii framework by the united states looks to be one of the most important and urgent issues. it is also very important to improve and harmonise accounting standards. the views of g20 countries sometimes differ as to the role of accounting. for instance, one contentious issue is marking - to - market and the extent to which fair value accounting should be applied. it is vital that the accounting choices of standard setters better take on board the financial stability dimension, since they have an impact on the latter. lastly, the crisis has also highlighted the limitations of self - regulation ; it is also essential that the regulation of all systemically important institutions and markets be proportional to their potential impact on financial stability. however, in order to implement such an approach, agreement would have to be reached at the international level on a standard definition of the systemic nature of an entity, which clearly does not depend on its size alone. moreover, the consistency and the appropriate balance of such potential specific rules with the general rules must also be ensured. for instance, for banks, it is important to allow for the fact that the size of an institution is already taken into account in the prudential ratios, since capital requirements are proportionate to exposures. it is also important to bear in mind that the diversification of business lines, which goes hand in hand with a certain size of institution, may be a factor of resilience that should not be discouraged. this is an important and delicate task that has been entrusted to the fsb. 2. developing multilateral surveillance i will now turn to collective surveillance. let me start with the following simple observation : the crisis did not emerge from where we were expecting. our warning systems, both at the national

way to enhance the future of our financial cooperation is to alter the composition of the 24 - or 25 - strong imf executive board by 3 or 4 members. nevertheless, i consider that a number of principles should guide this desired reform : governance today should be adapted to a multipolar financial world. while all members should be represented in proportion to their involvement and responsibilities, more than the complex calculations of quotas and voting rules, we should fundamentally focus on the functioning and mandate of the imf. in this respect, senior officials should be appointed strictly on the basis of their expertise and the imf ’ s mandate should be expanded. focusing on exchange rate developments alone is no longer sufficient, and if the imf is to be able to contribute to ensuring international financial stability, it must pay greater attention to capital account developments. furthermore, this contribution cannot simply be a matter of complying with a rigid and uniform body of rules. it must take account, in a balanced manner, not only of each country ’ s level of development but also the systemic risk that it constitutes within the global financial system. by the same token, for member countries, this requires effective participation in multilateral bodies aiming to foster the development of the international financial system, either through capital account liberalisation or provision of liquidity where necessary, as the crisis has clearly shown. neither can we escape from the fact that the international status of certain countries ’ currencies affords them a specific role or may affect them adversely. in all of these matters, beyond the stereotypical vision of the different interests of developed and emerging countries, i wish to recall that in fact we have converging interests : since we are closely linked in terms of finance and trade, it is in our collective interest to participate in the surveillance of financial systems within an enhanced multilateral framework. to conclude, i would like to reiterate that the new financial architecture that we are in the process of defining should not be hidebound but gradually adapted to address the major developments in the international economic and monetary system. in this regard, the possible emergence of a “ multicurrency ” international monetary system deserves particular attention. naturally, the us dollar remains the world's foremost reserve currency. similarly, the euro plays a major role. however, the increasing prominence of other currencies, provided of course that they become fully convertible and tradable without any restriction, suggests that a new situation may materialise in which a growing number of curre