that level of progress has been less apparent on putting in place arrangements for handling and resolving cross - border crises. during that period a number of countries, including the uk, have improved their processes for handling financial crises – including for crises sparked by business continuity events. and there have been a number of exercises and co - ordination initiatives in different regional groups ( for example amongst the nordic countries, dutch and belgian authorities, and more widely across the eu ). but there has been less progress on the wider international front. overall, i do not know anyone who believes that we have established either the common approach to crises or the practical machinery which would enable us to handle a complex cross - border failure with confidence. i would like to make some suggestions tonight on how we might take matters forward. when and how should the state intervene to prevent or manage a financial crisis? of course the underlying questions are very difficult even for one country. financial markets are often volatile and they can only work well if investors and firms expect to live or die by their own decisions and do not come to rely on a safety net to mitigate their losses. to avoid that ‘ moral hazard ’, authorities have tended to be reluctant to spell out in what circumstances and what ways they would gerard caprio and daniela klingebiel, 2003. “ episodes of systemic and borderline financial crises ”, world bank research dataset. http : / / econ. worldbank. org http : / / www. fsforum. org / home / home. html be willing to help support a market or a participant, beyond making clear that it would only be in exceptional circumstances and where it was essential in the wider systemic interest. but the difficulty in spelling out underlying reasons must not become an excuse for lack of analysis and preparation. in order to make cross - border crisis management work, we may have to consider sacrificing some mystery – even if only amongst ourselves – for greater effectiveness. the most recent cases of official emergency liquidity support to uk banks occurred in the early 1990s, when the bank lent to a few small banks in order to prevent wider loss of confidence in the banking system. the memorandum of understanding ( mou ) between the treasury, fsa and bank which sets out our current roles in maintaining financial stability makes clear that decisions on support operations now rest with the chancellor, acting in the light of advice from both the bank and the fsa. following the early 1990s experiences, eddie – now lord george – discussed

hirsh describe case western university ’ s work to support community organizations by providing critical data and information to help them determine which properties are priorities for acquisition and rehabilitation, keep abreast of current property conditions, and monitor issues as they arise. this means keeping up - to - date records of foreclosures, sheriff ’ s sales, and the reo status of properties, as well as gathering information on vacancies and tax delinquencies that can serve as a proxy for identifying properties that may be falling into delinquency. these researchers are also using technology to develop tools to help communities strategically invest in areas with significant needs, but also great potential. moreover, they recognize the need for tools to help community organizations monitor the ongoing conditions in their neighborhoods so that they can anticipate and plan for bumps along the road to recovery. the partnership between case western and its cleveland community partners is a fine example of the fourth lesson we have learned from this crisis : the need to collaborate in new ways in order to develop a comprehensive approach to neighborhood stabilization efforts. researchers from case western are part of a neighborhood stabilization team that meets monthly to exchange information on the status of particular properties and discuss intervention strategies. the conference publication is replete with examples of local collaborations that have successfully addressed neighborhood stabilization issues through partnerships between federal, state, and local governments, community organizations, lenders, servicers, universities, foundations, and others. moreover, the most promising initiatives that you will be hearing about over the next two days take a comprehensive view of community development. it is not sufficient, given current economic conditions and the significant needs of our neighborhoods, to do things the way we have always done them. homeownership, long promoted by federal policy and facilitated by local housing organizations, cannot and should not be the only alternative for reo properties. indeed, redevelopment strategies profiled in the conference publication include rental housing, lease - purchase, and even converting owners to renters to avoid vacancies. including rental options among the mix of stabilization strategies makes particular sense at a time of high unemployment. even in the best of times, homeownership limits mobility in the labor market. today ’ s summit and companion publication also highlight several promising models of “ non - redevelopment ” to stabilize communities, such as simple code enforcement, land banking, and demolition. the scale of the problem is such that communities must consider a variety of strategies to repurpose reo properties within the context of