##s and broadens in a sound financial environment. the imf and the world bank have an important role to play with regard to crisis prevention and crisis resolution. i welcome the progress made in this area : · the imf ’ s surveillance will be further strengthened. · transparency will be enhanced. · more and more countries are realizing the benefits of the financial sector assessment program. · and the rules governing access to the fund ’ s financial resources in capital account crises have been strengthened. going forward, the focus should be on implementing these measures. v. ladies and gentlemen, the world bank and the developing countries are facing major challenges too. · let me begin with the doha round. i find it inappropriate that industrial countries spend hundreds of billions of dollars each year to protect their own products. these subsidies are several times larger than the amount of development assistance. this makes it difficult to exploit the virtues of globalisation for the benefit of all. it would be extremely unfortunate if the failure of the cancun negotiations would lead to trade conflicts. again, there is no reasonable alternative to the multilateral approach. · second, the “ millennium development goals ” reaffirmed at monterrey are a guideline for german policy. achieving these goals requires joint efforts. well - targeted financial aid to developing countries can only be successful if combined with good governance and sound institutions. · last but not least, a remark on quotas and voting rights. i know that many countries are seeking higher voting shares. yet, the proper functioning of the imf and the world bank as financial institutions requires that a strong link is maintained between member countries ’ quota shares and their capacity to contribute to the financial resources as reflected by their economic weight. however, i believe there is certainly some justification for an increase in basic votes. thank you for your attention.

policy. the subprime crisis in the us has often been referred to as the trigger for the financial crisis, but the root causes of the current crisis lie deeper. in a nutshell, we experienced an enormous credit boom during a period before, characterised by an extreme undervaluation of risk. this was supported by favourable macro - economic conditions – not least, interest rates that were too low for too long. excessive risk - taking was further encouraged by a lack of transparency and market failures in the process of credit risk transfer. pro - cyclicality in the institutional design of financial markets, such as capital adequacy rules, accounting rules and remuneration schemes, also encouraged extreme leverage in the financial system while they are now contributing to a fatal deleveraging. when the famous “ wake - up call ” occurred, financial markets panicked and suffered a massive liquidity shock. from the onset of the crisis, in august 2007, the eurosystem began supporting the financial system, especially in terms of frontloading liquidity provision during minimum reserve periods and extending the average duration of its open market operations. these measures helped financial institutions through a period of unprecedented high volatility on inter - bank markets. however, after the collapse of lehman brothers and the ensuing “ earthquake ” of september 2008, the eurosystem had to extend its liquidity operations vigorously in order to keep euro area money markets alive. several measures were taken in order to calm the markets, of which the temporary guarantee of full allotment at fixed rates has been the most important. furthermore, we have temporarily widened the scope of eligible collateral and we have stepped up providing relief to euro area financial institutions via currency swap arrangements with liquidity in foreign currencies. taken all together, these measures have resulted in the eurosystem assuming the role of the central counterparty in the money market. while this has saved euro area financial markets from breakdown, it is obvious that playing this role is something that cannot and should not last forever. however, the other post - lehman measures are staying in place for the time being owing to the ongoing vulnerability of the money markets. in particular, the governing council of the ecb has declared that it will continue the fixed rate tender procedures with full allotment for as long as needed and, in any case, beyond the end of 2009. while volatility in euro money markets is still very elevated, we can observe that some relevant risk - spread indicators are trending back to –