##overs from systemic shocks or economic imbalances in an increasingly integrated world economy. moreover, a global economy requires global policies. the g20 framework for strong, sustainable and balanced growth, which is the first systematic multilateral assessment of global imbalances, is therefore welcome. it is a constructive approach to ensure that macroeconomic and structural policies of key countries take into consideration their external spillovers, and in particular the risks they entail for the global financial system. the recently agreed set of indicative guidelines for global imbalances is an important milestone in that respect. by using structural approaches, the g20 framework will help us in benchmarking acceptable levels of global imbalances, and provide guidance on how to deal with unsustainable imbalances in an orderly manner. it is now of foremost importance to implement the framework effectively, and to fully live up to the expectations that the g20 process raised internationally. multilateral surveillance on domestic policies of systemic countries to ensure their orientation towards medium term stability and sustainability should be strengthened on other fronts as well. the ecb has always been supportive of the imf ’ s multilateral surveillance decision in this respect, and the recently conducted first round of imf spillover reports can be seen as a step towards a broader and more comprehensive framework. moreover, today ’ s multilateral surveillance framework is probably insufficient with respect to disciplining mechanisms, and what is needed is a mechanism that ensures that imf members look beyond their short - term policy goals and internalize their impact on the global system. what is needed more than ever, is a mechanism to ensure that the concept of external stability becomes a cornerstone of multilateral surveillance. this means that it needs to be taken into account whether a country ’ s exchange rate, monetary, fiscal and financial sector policies are destabilising for other countries or regions. this would be a considerable strengthening of international cooperation to achieve our common goal of economic and financial stability. 4. what can we learn from all this for the current situation in europe? also europe had to learn the hard way that loose policies and large imbalances also in the private sector, rather than only the public sector, may have severe implications for public sector budgets and risk systemic crises. especially in the banking sector, our regulatory framework and surveillance turned out to be insufficient. while finance was getting increasingly regional or global, regulation remained mainly in the national realm, and discipline was delegated too much to the markets itself. but in less

banks through infusion of public money and, second, to foster confidence in deposit guarantees. in an european framework, such actions involve mainly national decisions which had to be made, in many cases, with some urgency. hence the impression that, at least initially, the coordination may not have been perfect. but things are falling progressively into place and i am confident that any remaining issues will be quickly dealt with, according to the roadmap and joint principles recently adopted by ecofin ministers. so i would encourage all market participants to take a step back and, as jean - claude trichet said “ collect themselves ” to look at the whole package of measures which have been publicized. true, they have been announced through a succession of public statements. but, taken together, they represent decisive steps and a coherent package towards restoring confidence. i am convinced that their impact on the real economy and future growth is going to be extremely significant. overall, it is fair to say that the euro has passed the test and comes strengthened out of the current difficulties. the eurosytem will keep fulfilling its priority mandate of price stability while also contributing to the broader objective of financial stability. governments are increasing their cooperation. so the eurozone has shown it is well equipped to live up to its responsibilities as a truly global player in the international monetary system of the 21st century. i thank you for this opportunity to present my views.