of its member countries. this financial sector surveillance needs to be better integrated into imf country reviews. this will allow potential risks to be identified earlier so that authorities can address any problems, rather than calling on the fund for financial assistance in the midst of a crisis. achieving this integration may require re - thinking the fund's internal structure to ensure that all facets of its work feed effectively into its surveillance and provide sound analysis of the interaction of economic and financial developments and risks, both within and between countries. let me now turn to the second key principle - legitimacy. the fund's effectiveness, and hence its ability to promote global financial stability, is what ultimately gives it legitimacy and credibility. at the same time, its effectiveness depends on its legitimacy as a truly global institution, and on a shared sense of trust and responsibility among its members. global issues can't be effectively addressed if key players feel that they don't have an adequate voice as imf members. in this respect, it is clear that important aspects of the fund's governance arrangements have not kept pace with changes in the global economy. in particular, quotas and voting power at the fund need to better reflect the growing power of asian and other emerging - market economies. the issue of quota and voting power is complex and will persist for years to come, since asia is likely to continue to grow faster than other major regions. this suggests the need for a comprehensive solution, and we should work towards this end. but we also need to be pragmatic. we need to make concrete progress on the quota issue in the short term to show that members are serious about aligning the representation of asian members with their economic weight. of course, with a larger voice comes greater responsibility. so let's be clear : a larger stake for asian members implies that they should be prepared to shoulder their fair share of the responsibility for promoting global financial stability as part of the international monetary order. this brings me to the third principle - effective use of markets. as i have already highlighted, the role of the fund in the 21st century should be to promote financial stability by supporting a market - based international monetary order. this means that the imf must work to ensure that the international financial infrastructure is sound, that countries pursue sustainable policies, and that incentives encourage the appropriate pricing of risk and the efficient allocation of resources. it also means that the imf should play a more active role in establishing the " rules of the game, " clear

david dodge : policies to sustain growth domestically and internationally remarks by mr david dodge, governor of the bank of canada, to the foreign bankers ’ association in the netherlands, amsterdam, 13 may 2003. * * * good afternoon, ladies and gentlemen. i have been looking forward to coming to amsterdam since governor wellink extended the invitation last year. i must say that when you consider what has been happening in the world economy, it is certainly an interesting time to be a canadian at international meetings such as the bis meeting i attended yesterday. my colleagues from other central banks have often commented on canada ’ s relatively strong economic performance over the past two or three years. in response, i have told them that there is certainly an element of good fortune in that performance. but, fundamentally, it reflects the extraordinary efforts made during the 1990s to put a coherent economic policy framework in place, and i want to begin by talking about that framework. the four principles of economic policy let me quickly add that this is not simply a canadian story. the framework that i ’ m talking about emerged from international discussions and has relevance for all national economies. in the 1980s, a consensus was reached among oecd countries on a set of economic policies that would provide the strongest base for sustained economic growth. this consensus is based on four principles : trade liberalization, structural reform, fiscal prudence, and inflation control. i will spend a few minutes on each one of them, drawing on canada ’ s experience in recent years. let me begin with trade liberalization. your own mission statement acknowledges the importance of the free flow of goods and services, as well as of capital and people, within the european community. freer international trade allows countries to better exploit the gains made from increased specialization and enhanced productivity. canada has promoted reduced barriers to multilateral trade since the havana conference of 1947, which launched the general agreement on tarriffs and trade. in 1989, canada signed a free trade agreement ( fta ) with the united states. in 1994, mexico joined the group through the north american free trade agreement ( nafta ). both of these agreements initially sparked a great deal of political controversy in canada. however, they have opened up markets and created tremendous opportunities for canadian entrepreneurs. our exports have flourished as a result. but freeing up trade means more than setting up regional free - trade blocs, such as nafta and the european union. canada is hoping to see meaningful progress at the world trade organization ’ s doha