in collaboration with the world bank. switzerland volunteered to undergo such a check - up in 2002. once more, it was a useful and gratifying experience to interact with outside experts. and the reason i am saying this has nothing to do with the fact that the swiss financial center came out of this surveillance exercise with very high marks. 3. financial crisis resolution let me now turn to the second part of my presentation, the fund ’ s role in crisis resolution. here i have no direct swiss experience to report on since my country, fortunately, never had to resort to financial support from the fund. i will therefore speak from the perspective of a medium - size shareholder that believes that financial crises are market failures with potential systemic risks and that the fund can and should play an important role in resolving them. the nature, scale and spread of financial crises have changed dramatically since the tequila turmoil in mexico in 1994. financial integration and capital account liberalization brought about a huge increase in financial flows. emerging economies did benefit from this new reallocation of international savings and some staggering economic results were obtained ( annual gdp growth between 1986 and 1996 for countries in south - east asia averaged close to 8 percent ). however, the new financial setting also made emerging countries particularly vulnerable to sudden changes in market sentiment. losses in investors ’ confidence could erupt much more quickly and spread across markets in a matter of days. unfortunately, the economic and social costs of the new crises also increased substantially. i think we can safely say that the fund, like anybody else, was caught by surprise by the virulence of the turmoil that hit asia in the 90s. when thailand and even more so korea were on the verge of financial collapse the fund looked very much like those generals always ready to fight the previous war. not even its financial means were adequate, and governors were rushed to decide a speedy 45 percent increase in quotas in january 1998 to supplement the rapidly depleting fund resources. it didn ’ t take the fund long, however, to react, to pick up the challenge and, all things considered, to come out of that difficult situation relatively unscathed. no - one should claim that everything went smoothly, though, or that no mistake has ever been made. from the side of the fund, too, it was a particularly bumpy trial and error process. quickly restoring market confidence became the name of the game. how? this is the difficult question. i shall not elaborate on the design of the various programs

all, superior reasons and understanding, by which we are capable of discerning the remote consequences of all our actions ; and, secondly, self - command, by which we are enabled to abstain from present pleasure or to endure present pain in order to obtain a greater pleasure in some future time ”. so for smith, patience was both a distinctive and valuable human commodity. subsequent research has shown he was right. patience is peculiarly human. our nearest evolutionary relatives, discount almost entirely outcomes more than one minute into the future. 1 it is not that animals are incapable of far - sighted behaviour – for example, squirrels collecting nuts or birds flying south for the winter. but these are not acts of spontaneous self - control, like saving or dieting. rather, they are genetically pre - programmed. the squirrel does not store food as a dietary device. the patience “ gene ” the source of human self - command, or patience, appears to be neurological. recently, this has become detectable using brain imaging technology. that suggests the pre - frontal cortex of the brain is key to self - control and patience in humans. 2 the pre - frontal cortex develops with age, being least developed in small children. in other words, neurology has confirmed the suspicions, and frustrations, of generations of parents with impatient toddlers. the pre - frontal cortex is also the part of the brain which has developed most recently. human skulls developed from prominent brow ridges of neanderthal man to the high straight foreheads of today ’ s homo sapiens to accommodate the growth of the pre - frontal cortex. that tells us the patient part of the brain was close to being fully developed perhaps around 30 – 50, 000 years ago. today, although the pre - frontal cortex in humans is no larger than in a gorilla, its evolution has resulted in patience having become a distinctive, perhaps unique, human attribute. as such, it is not too big a leap to imagine patience having had important implications for the evolution of human systems, economic and social. take economic growth. the neoclassical growth model in economics provides a simple link between patience and development. patience generates savings by households which in turn finances investment by companies. and capital accumulation by firms, growth theory suggests, is then the prime driver of future output. countless empirical studies, across time and countries, have confirmed that theory. long - run patterns of growth are also consistent with a patience - based explanation. relative to animals, human systems have experienced extra -