fund to give direction to developing countries in times of crises than to provide similar advice to advanced countries. notwithstanding the weaknesses highlighted and the clear need for improvements, the impression gained at the annual meetings earlier this week suggest that, with the right level of commitment from all stakeholders, the bwis may adequately reform in the period ahead and regain their relevance. where do we go from here? with the financial landscape around us under severe stress, we can rightly question, “ is there light at the end of the tunnel? ” given the changing landscape of the world economy and the failure of today ’ s multi - lateral institutions to provide us with a collective response to the crisis, an ambitious rethink of the global financial system is required. we need to go far beyond incremental changes of the global financial environment and our ambition in the reform of the global architecture of finance and economic policy making must match the gravity of the crisis we currently face, as well as the realities of the global economic environment. the recent financial turmoil has exposed the peripheral nature of the imf's functions in global finance. once the crisis struck forcefully, its role was unclear and peripheral. the fund needs to be strengthened in order to place it on the centre stage, unless we would wish it to become totally irrelevant. on the other hand the crisis presents the imf with an opportunity to revive itself. with the necessary expertise, its universal membership and the convening power it can play a vital role into the future, especially if it is able to transform its governance structures to meet the challenges of tomorrow ’ s world. other institutions such as the financial stability forum, the bank for international settlements and the g - 20 have also enhanced their claim on providing leadership in the global economic environment. the g - 7 has proved itself to be increasingly irrelevant in the changing economic environment of today. lessons to be learnt from the current crisis it is too early to draw lessons from the crisis that is yet to run its full course. however we must continue to debate the causes of the crisis and contribute to solutions to avoid a similar situation globally and at home. we need stronger institutions that should be lasting, so that the current problems would not recur quickly. however, as the australian prime minister recently said at the united nations : “ the failures that we have seen in recent times do not lie in the institutions alone. the failures lie more in the poverty of our political will to animate these institutions to discharge of the purposes for which

t t mboweni : lessons to be drawn from the financial crisis for multilateralism and global financial co - operation keynote address by mr t t mboweni, governor of the south african reserve bank, at a charity gala dinner, organised by the university of pretoria, pretoria, 15 october 2008. * * * introduction i would like to express my sincere appreciation to the university of pretoria and the organisers of the charity gala dinner for inviting me to address you tonight. i am glad to see that so many representatives of the financial sector are attending this function, notwithstanding the present financial turmoil. there are some encouraging signs that following the concerted commitment shown by various governments and central banks, and backed up by strong action, we may be finally embarking on the road to recovery from one of the worst crises the financial world has had to face. the global financial system has malfunctioned and there appears to be a need to seriously consider what changes and adjustments are required to ensure that the global financial architecture is better equipped to deal with future challenges. given that the changes will inevitably require certain vested interests to be confronted, the international community will have to commit itself to put the greater good of all of us at the centre of any efforts going forward. the change must, however, be managed and embedded in concrete actions plans to create stronger institutions, with more balanced representation, that will contribute to long term financial stability and sustainable growth. the global economic outlook presently, we are witnessing a severe financial crisis, a crisis that many commentators view as the worst since the great depression. even before the escalation of the financial crisis, growth in the advanced economies had been faltering, as shown in the recent world economic outlook of the imf. growth in advanced economies has weakened and is well below potential. economic activity in developing countries appears to be moderating at a somewhat faster pace than had been anticipated. the danger of a major and protracted slowdown in global growth, with inflationary pressures only likely to react with some time lag, is indeed very real. as most of you are participants in the financial market, i do not intend to go into any great detail about the causes of the global market turmoil. by now we seem to have a general consensus that accommodative monetary policy conditions in developed markets laid the foundation for an aggressive search for yield, which resulted in mispricing of risk on a large scale, coupled with some over - zealous “ financial innovation