##ts of this proposal before taking a final view. imf resources 18. the announcement of a trebling of the fund ’ s resources in the london summit in april 2009 had a salutary impact on reducing uncertainty when the crisis was still raging. as a follow up to that announcement, we welcome the expansion of the new arrangements to borrow to us $ 600 billion, and call on all members to ratify the increased level at the earliest. countries which have not been traditional creditors, including india, have come forward with sizeable contributions to the expanded nab. this should signal the need for further governance changes in the fund. 19. we have always affirmed the importance of maintaining the fund as a quota based organization. this implies that the quota - based resources and borrowed resources should be in an appropriate proportion. we supported the decision to substantially increase the nab on the understanding that since the need for resources is urgent, and a quota increase is time taking, the nab would be a temporary bridge to an eventual quota increase. we do not see the need for the fund ’ s lendable resources to be increased any further at this stage. we support a substantial increase in the quota resources so that the nab can be rolled back once an increase in quotas is effected. this will ensure that the fund remains a quota - based organization as it should be. governance reform 20. governance reform will be central to the legitimacy and effectiveness of the fund ’ s mandate. we appreciate that the managing director has acknowledged this in his statement. if the clarification and refocusing of the mandate of the imf is to have legitimacy, it should follow and not precede a change in the governance structure, including quota shares reflecting the present and emerging global economic realities measured in the most appropriate manner rather than on the basis of an improved but still flawed formula. 21. the size of the quota increase is closely linked to the crucial governance issue of realignment of quota shares in the fund. a large quota increase not only affords the opportunity for, but also requires an ambitious realignment of quotas, to meet the expectations of the emerging markets and developing countries ( emdcs ) who form a large section of the membership. only such a substantial shift of quota shares from advanced countries to emdcs so as to better reflect current global economic realities would enhance the legitimacy of the fund. 22. we reiterate our call for at least a 7 per cent shift in quota shares in favour

differing interpretations subsequently, thereby sacrificing clarity for expediency. in our view, the best way to achieve this objective is by amending the articles of agreement to give the fund oversight over the international monetary and financial system and over financial sector policies within the conduct of domestic policies by members. 9. we believe that the fund is strategically positioned to conduct effective multilateral surveillance by virtue of its universal membership and the forum for peer review that it provides. accordingly, we can engage constructively and with an open mind towards building a wider consensus on improving multilateral surveillance through innovative instruments such as spillover reports ; multilateral consultations ; and enhanced interaction with regional / country groups. for a reality check, there should be trial runs before taking a view on their usefulness. 10. bilateral surveillance is at the core of the fund ’ s mandate and the proposals for improving multilateral surveillance should not compromise the pursuit of robust and evenhanded bilateral surveillance. there is need for ensuring synergy between imf ’ s bilateral and multilateral surveillance. improvement in timeliness and increased communication is desirable, but care needs to be exercised to eschew undue proliferation of reports whereby the quality of surveillance is compromised by spreading resources thinly and widely. 11. the issue of financial sector oversight is indeed a crucial one. we find merit in assessing the efficacy of new approaches. mapping global financial networks, deeper engagement with large complex financial intermediaries ( lcfis ), asset managers and central counterparties ( ccps ) ; and closer and more effective cooperation with standard setting bodies, including the ongoing engagement with the financial stability board ( fsb ) on the early warning exercise ( ewe ) are some initiatives in this genre. the lessons of the crisis also underscore that the focus on important financial centres and systemically important countries should be intensified. 12. there is a rationale for strengthened financial sector surveillance in assessing macro - systemic risks in view of the lessons of the crisis. however, the modalities of operation in this role would need deeper consideration to guard against mission creep and to preserve the distinct roles of the imf on the one hand and the fsb and the bank for international settlements ( bis ) on the other. we have concerns about the need and utility of a mandatory financial sector assessment programme ( fsap ) at this stage. it is better to preserve the voluntary nature of fsap with enhanced efforts to secure the widest participation by making fsap