an upward interest rate adjustment lies with us. the dutch success up to now has not been achieved overnight. it is the upshot of a long and consistent road which wim duisenberg has done a great deal to shape. iii wim duisenberg comes from friesland. what is puzzling is how he comes by the name of duisen - berg. as you know, friesland is so flat that you only need to stand on a newspaper to be able to overlook the entire countryside. frisians are supposed to be very attached to their native locality, which is by no means the same thing as being “ provincial ”. and they are said to be, above all, indomitable, which the uninitiated sometimes interpret as “ self - willed ”. but that doesn ’ t matter. as you will know, such a characterisation is not entirely unknown for a westphalian, either. that is hardly surprising. after all, our birth - places are only 120 kilometres apart. there were signs of wim duisenberg ’ s international vocation at an early age. as a student he was particularly interested in international economic relations. he wrote his doctoral dissertation on the topic : “ the economic consequences of disarmament ”. and he worked for the international monetary fund for five years. but then he responded to the call of his homeland. there was nowhere he was not needed. economic research needed him. he became a professor of macroeconomics in amsterdam. the government needed him. he became the minister of finance at an early age. actually, that ’ s a contradiction in terms. youth, after all, tends to be idealistic and impetuous, whereas age tends rather to be distrustful and wary. and a finance minister needs to be highly distrustful and wary. the banking industry needed him. he joined a commercial bank. and finally the central bank needed him. he became its governor, which elicited from him the following comment : “ it ’ s the best job... the pity is that there ’ s only one such job per country. ” well, being central bank governor in the netherlands is a longer - term occupation. anyway, i don ’ t know any other country that has had only three governors in the past fifty years. his spell as governor did not begin very auspiciously. against his advice, the guilder was devalued against the d - mark as part of the major realignment within

overvalued exchange rate. with ltcm, there was similar excessive leverage and reliance on short - term financing arrangements. going forward, international organizations and national authorities will have to invest more resources in monitoring markets for signs of stress. while there is not a single indicator of banking or balance - of - payment crises, the tracking of financial market prices in many markets and financial flows across borders should help to identify trouble spots. where appropriate, national authorities should consider broadening the information they collect. complementary to these efforts, national authorities can take steps to facilitate transparency within markets. the key to avoiding excessive leverage is the market discipline that should be provided by market participants ’ creditors and counterparties. but market discipline works well only if counterparties share sufficient information to allow reliable assessments of their risk profiles. supervisors need to ensure that, before establishing credit relationships, regulated entities have a clear picture of a counterparty ’ s risk profile and have ensured that information relevant to that relationship will be available on a sufficiently timely and ongoing basis. public disclosure also has an important role to play, and authorities should make sure that appropriate requirements are in place. to be sure, public disclosure is unlikely to be sufficiently timely or detailed to meet the needs of creditors. still, it is essential to protect retail depositors and investors, and it provides a standardized framework from which customized bilateral disclosures can be drawn and elaborated. lastly, industrial countries have the responsibility to assist in the training of supervisors in emerging market economies, an area in which, i am pleased to say, we in the federal reserve system have been active for a while. we cannot afford not to take this responsibility, and in this regard, virtue is more than its own reward. we benefit in such technical assistance by strengthening our contacts with supervisors abroad, which is important when examining internationally active institutions based here at home, and by reducing the potential for adverse shocks from abroad. issues for further consideration as i noted, one of the contributing factors to asian financial distress was the ill - considered buildup of short - term foreign currency borrowing by banks in these nations from banks in industrial countries. some have attributed such behavior to the effects of an inappropriately low capital charge in the basel accord for short - term interbank credit extensions. they argue that the experience requires an increase in capital charges in order to effectively control the quantity of interbank loans. i do believe that we, in fact, should question the treatment of interbank credit by the accord. credit risk, in my