to have enough weight, it is necessary that the key issues for the world economy really are discussed at the imf ’ s table and not at others. those who wishes to strengthen the imf – and are serious about it – could therefore not create new forums outside the imf with a view to discussing matters that fall within the imf ’ s mandate. if this is done, the organisation will, in practice, be undermined. 3. one way of reducing the need for creating new fora, and, at the same time, in a pragmatic way approach issues of representation, would be to work more actively in the executive board with various ( small ) committees / subcommittees ( similar to those in many national parliaments and in the executive board at the world bank ). for example, there could be a committee for global exchange rate issues, in which the large currency blocs are represented ; another committee focused on poverty issues, where poor countries and major donor countries have a high representation ; and a committee for crisis resolution, in which creditors have a strong position, etc. reforms in this direction could also increase the efficiency of the executive board. it could also imply that a small increase in the number of chairs would be manageable. the problem that a number of countries would end up outside some of the discussions, should not be exaggerated particularly if the consequence of total changes is that imf gets a more central role in the international discussion than today. to the extent that the problem remain, it should be possible to manage through a high degree of openness. 4. the role of the executive board should be stronger and more clearly defined in relation to the imf ’ s management. the current principle whereby the imf ’ s managing director is both chairman of the board and responsible for executing the board ’ s decisions is open to question. with a more clear division of responsibilities, the imf management could be more effective and, in practice, possibly stronger. it is also vital that the board is represented at a high enough level with full confidence from the capital level in order for the board to be able to become an effective arena for central policy discussions. 5. the imfc could be reinforced. the imfc deputies group could also be strengthened by convening also in between the annual and the spring meetings. it is important that all countries participate at a high level ( today, many countries participate with their executive directors ). one likely reason that the bis functions more smoothly,

should principally aim to quickly restore confidence in the affected countries ’ economic policies. the intention should be that the loans be paid back to the imf after a relatively short period of time. when a serious crisis is at hand, it is hard to say no to a loan request. at the same time, it is important to counter tendencies towards moral hazard, which in the longer term could result in both riskier economic policies and irresponsible lending from private creditors. this is a genuinely difficult issue. there are no easy solutions. the nordic - baltic constituency has argued that the use of the imf's loan instrument must be based on unambiguous, predictable rules. and that the rules be applied. this has not always been the case, e. g. as regards certain decisions concerning exceptional access, i. e. where the imf has granted substantial loans without requiring sufficient conditionality. in a number of instances the result has been a longer - term dependence on loans and in several cases recurrent crises as well. we should now, when the economic and financial situation in the world is relatively calm, take the opportunity to simplify and clarify the rules further, particularly as regards their application. when the next financial crisis occurs it may be too late. another aspect of the fund's function in crisis management is its role when countries are forced to suspend payments. it is possible to further strengthen the instruments available today – collective action clauses as well as principles for stable capital flows and fair debt restructuring – in order to ensure a transparent and predictable debt restructuring process for borrowers and lenders. these instruments lay the main responsibility for agreeing on debt renegotiation terms on the borrower countries and creditors. the fund ’ s most important function in such circumstances is to provide the parties with the best possible information about the economic situation so as to facilitate agreement. the fund should also try to contribute to ensuring that economic policies in the debtor country make it possible in the longer run to restore balance and to reduce the country ’ s debt to a level that is sustainable in the long term. the fund itself may have to provide some financing to achieve this, but when it comes to countries in highly vulnerable positions fund financing can only play a limited role. it will not always be possible to bring about a sustainable debt level in this way without drawn - out negotiations and considerable economic costs. to make these kind of situations more predictable, and also more easy to resolve, it would be desirable to