ratings should be changed, the authorities ’ responsiveness to risk strengthened and arrangements for dealing with stress in the financial system implemented. other international bodies and institutions that have responded to the financial turbulences include the basel committee on banking supervision which just announced that it will take a number of steps to bolster the resilience of the banking system to financial shocks. moreover, the imf is sharpening its analysis of the financial sector and macro - financial linkages. it is welcome that the fund places greater focus on financial sector analysis in article ivs and continues its emphasis on financial sector assessment programmes. in this context, i would highlight that all 27 member states of the european union have either already completed an fsap or confirmed their future participation. it is welcome that a number of countries, including some systemically relevant ones, have expressed their intention to undergo an fsap exercise. at the eu level, the council of european ministers of finance ( ecofin ) has coordinated work aimed to strengthen supervisory and financial stability arrangements. this relates to the introduction of a european mandate for national supervisors, the clarification and strengthening of the functioning of the committees of supervisors at the level of the 27 eu member states and the wider use of colleges of supervisors to re - enforce the supervision of cross - border banking groups. moreover, a memorandum of understanding on cross - border cooperation in financial crisis situations between all relevant authorities in the eu, that is supervisory authorities, central banks and finance ministries, has been signed. in sum, a number of significant initiatives are underway at the various levels of governance of the global financial system to respond to the challenges of globalisation. to ensure that the responses by the bodies and forums in charge of global economic and financial stability are effective, it is of course crucial that they collaborate closely and complement each others ’ efforts. this should also be the case as regards the interaction between the fsf and the imf. conclusion the phenomenon of globalisation entails many important changes to the global macroeconomic, financial landscape. associated with this, it entails many policy challenges – both in terms of domestic macroeconomic policies and the international financial architecture. at the domestic level, a key challenge for monetary policy is to actively monitor changes in the inflation process, while continuing to solidly anchor inflation expectations. the strong relative price movements associated with globalisation make a firm focus on price stability is as essential as ever. at the same time, such a sound monetary policy framework can lay the foundations for foster

push forward, in our view, is that of crossborder supervisory coordination, particularly better information sharing between home - host supervisors should be warranted. this is particularly important as the current crisis shows that there is a need for home supervisor of global financial conglomerate and banks to recognizing that global bank ’ s local operations may be systemically important for the host economies. in closing, i would like to share with you what i believe are the key changes in our financial landscape, resulting from this global crisis. first, bank business model would likely become more conservative, placing less reliance on wholesale financing and use of leverage, while focusing more on risk management and higher liquidity buffer. consumers themselves would be more risk averse and prefer to stick with simple transactions and products. as mentioned already, regulatory framework would be strengthened, especially the use of macroprudential oversight that focuses on system - wide stability. as such, closer supervision of systemically important financial institutions, including non - banks, would be required. finally, the microprudential oversight would also be strengthened to rectify previously identified shortcomings, particularly the basel ii framework, corporate governance, and incentive misalignment. though it looks as if we could be in the process of creating a “ new world order ”, given what we have done so far in strengthening our financial sector resilience, i believe that this transition would be a smooth one and add further strength to our financial system. needless to say, a strong financial system is the backbone of sustainable economic growth in the longterm. thank you for your attention.