a new supplementary consultation procedure in a multilateral format. i trust that this multilateral consultation following the spring 2006 imfc meeting has been useful. and i have noted with satisfaction that the policy plans, set out by the participants, represent further progress in the implementation of the global strategy that the international community has endorsed. i also trust that these policy plans which are being implemented will make a significant contribution to reducing imbalances. apart from strengthening the multilateral dimension of surveillance, the fund is also in the process of adjusting its regional surveillance. experience has already been gained in the conduct of this form of surveillance as regional reports on some monetary unions, including the euro area, have been prepared. that said, i deem it useful that improvements are being considered to place more emphasis on the interaction between surveillance at the regional and the country level. another area that deserves attention is the treatment of intra - regional linkages and cross - country spillovers. moreover, and on a more general note, i consider it important for the fund to take full account of the specific features of the monetary unions that are subject to surveillance. finally, a field which is of particular interest to the ecb is the discussion on how the fund ’ s surveillance over exchange rates and exchange rate policies could be improved. on a general note, i consider that the fund in its exchange rate analysis should make a clear distinction between exchange rates which are a policy objective and those which are market - determined. as far as exchange rate policies are concerned, it is desirable for the fund to engage in a regular dialogue with the authorities and to provide a confidential view on the appropriateness of these policies from a country and from a global perspective. in this context, the fund could play a useful role in assisting systemically important countries to establish market - based policy frameworks. this would help minimise spillover effects in the form of asset price distortions and risks of disruptive market unwinding. for the fund to be effective, it is of course crucial that members comply with their obligations to surveillance, including as regards the provision of data. when it comes to exchange rates that are determined by market mechanisms, developments of the domestic economy should be reviewed, but communicating publicly on bilateral floating exchange rates should be avoided : it would always entail the risk of interfering with the proper functioning of foreign exchange markets and with the joint messages that the concerned authorities themselves would agree to give together on their own bilateral rates. standards and codes it has been a very

jean - claude trichet : the international financial architecture – where do we stand? speech by mr jean - claude trichet, president of the european central bank, at a meeting organised by the council on foreign relations, new york, 16 april 2007. * * * it is a great pleasure to be back at the council on foreign relations in new york city. my last visit to you was one year ago, and i must say that i always truly enjoy being here as the council offers the best possible setting to discuss relevant policy issues of an international nature. in my talk today, i will look at some key features of global economic and financial integration and elaborate on how the key international fora and institutions in charge of international financial cooperation have responded to this process. the global integration of national economies continues at a significant pace. the scope of goods and services as well as of capital and labour that are being exchanged between economies is rising. a growing number of countries are involved in this exchange and can reap the benefits associated with it. the benefits are indeed tremendous, and the institutional foundations of the global economic system, which are often referred to as the international financial architecture, deserve credit for having ensured that they clearly outweigh the related challenges. i will start out by sharing with you some thoughts on the major trends in the global economy, looking in particular at global trade and capital flows as well as the emergence of new actors on the global economic stage. thereafter, i will focus on the current state of the international financial architecture and flesh out how it has been adapting to the changing global economic environment. 1. major global economic trends – what are the issues? one important structural feature of today ’ s global economy is the interdependence of countries as they become more and more integrated into the world economy. this growing integration pertains not only to trade in goods and services but also to cross - border movements of labour and capital. looking at trade data, we observe that global trade openness – measured as world exports and imports of goods and services as share of world gdp – has basically doubled over the last 20 years and now stands at 60 percent. trade in intermediate goods and services as a result of the rising internationalisation of production processes has been a growing driver in this regard. while these changes are impressive indeed, even more far - reaching developments have taken place in the area of financial integration. if one takes for instance the share of gross international asset holdings in world gdp as a measure of