country to another in a world of ever deeper and swifter linkages. the relationship between national and international financial stability is obviously all the more important for countries, such as spain, whose banking system has a significant presence abroad. the expansion of spanish banks into latin america explains why the banco de espana has, in recent years, promoted the monitoring and analysis of financial stability problems in this region in particular, and in the emerging market economies in general, an area in which the role of the international monetary fund has become increasingly important. key lessons may be drawn from the recent crises that have affected emerging economies - though not only them - which should be borne in mind when designing mechanisms to reduce their frequency and cost. they include most notably : the need for a sound and well - designed institutional framework that protects property rights, prevents excessive public - or private - sector debt from accumulating and ensures economic stability ; the importance of ensuring consistency between the exchange rate regime and the domestic economic policies and institutional framework ; the risks entailed by the vulnerability associated with exchange rate instability processes for the balance sheets of different sectors in the economy, especially when there is a high degree of dollarisation ; the marked sensitivity of emerging market economies to potentially very volatile capital flows, the direction of which can change suddenly due, at times, to factors that may even be exogenous to the country experiencing them ; the importance of an appropriate regulatory and macro - prudential supervisory system to prevent crises generated in the financial system and to alleviate the ensuing costs if such crises finally occur, and to cushion the effects of shocks stemming from the real sector of the economy ; and, finally, the importance of distinguishing, as far as possible, between liquidity and solvency crises in countries ’ external debt and in governments ’ public debt, as a first step towards applying suitable remedies for resolving each type of crisis. as a result of these crises, and in collaboration with other international agencies and with national authorities, the fund conducted a far - reaching review of the so - called “ international financial architecture ”. numerous initiatives were adopted over recent years with the aim of lessening the frequency and cost of crises and of improving the stability of the international monetary system. accordingly, there has been a notable effort to increase the transparency of member countries ’ economic policies and to improve the information at the disposal of economic agents and, in particular, international financial markets so that the latter may exert market discipline more effectively. specific measures have been adopted to reinforce

financial systems. and it has also been sought to improve the crisis prevention and crisis resolution mechanisms available to the international financial community, including those particularly difficult cases in which sovereign debt restructuring proves inevitable. moreover, instead of relying on exhaustive international regulations which, as experience has shown, are difficult to approve and even harder to implement, all these reforms have relied on voluntarily mechanisms, based frequently on the adoption of codes of best practices, international standards and systems that offer incentives for their application. over the next two days the conference will address these and other matters of interest to us all, among them the risks associated with the persistent imbalances between the current account positions of the main economic areas ; the consequences of adopting different exchange rate regimes in the current environment of free capital flows ; the problems that arise from excessive public debt levels both in the emerging and industrialised countries ; and the role of the fund in the face of the challenges of economic and financial globalisation. all these issues have interested authorities, the private sector and the academic community for many years, although the way to deal with them has evolved in step with changes in the international economy. in what is an exceedingly dynamic environment, then, it is crucial to identify the root of the problems and possible solutions for them, which is precisely the chief aim of conferences such as this. we have an intense and fascinating agenda for discussion. it highlights, once more, the need for national authorities, international financial institutions and the academic community to work together in areas of common interest, taking advantage of their experience and comparative advantages and with the degree of technical excellence these matters require. i trust that these sessions will shed light on how to improve the functioning of the global economy and, in particular, the international monetary system. thank you.