##medies suggest themselves : less extreme monetary policies on all sides with some thought given to adverse spillover effects when setting policy, and better global safety nets to mitigate the need for countries to self - insure through reserve buffers. bis central bankers ’ speeches operationalizing coordination : some suggestions in an ideal world, umps such as qe or qee should be vetted by an independent multilateral agency for their spillover effects. for instance, following a complaint by an impacted country, the independent assessor could analyse the effects of such policies and come to a judgement on whether they follow the rules of the game. policies where the benefits are largely domestic, while the costs fall largely abroad, would be especially carefully scrutinized. and if the assessor deems the policy reduces global welfare, pressure should be applied to stop such policies. the problems with such an idealistic process are easy to see. where is such an impartial assessor to be found? and if a truly independent assessment came to the conclusion that certain policies were in violation, how would such a judgement be enforced? a more modest proposal perhaps then, it would be better to settle for a more modest proposal. central banks should not just worry about the immediate flows of capital to other countries from its policies, but the longer run reaction such as competitive easing or sustained exchange intervention that this would bring about. this would allow central banks to pay more attention to spillovers even while staying within their domestic mandate. at the same time, we should reduce the incentive for countries to engage in a repeat of substantial reserve accumulation by building stronger international safety nets. an interesting proposal from the imf is a liquidity line from the imf, where countries are pre - qualified by the imf and told ( perhaps privately ) how much of a line they would qualify for under current policy – with access limits revised every year after the article iv discussions and any curtailment becoming effective 6 months later. such a pushed line could overcome the problem that no country wants to approach the fund because of the associated stigma. conclusion the current non - system in international monetary policy is, in my view, a source of substantial risk, both to sustainable growth as well as to the financial sector. it is not an industrial country problem, nor an emerging market problem, it is a problem of collective action. the sooner we recognize that, the more sustainable world growth we will have. bis central bankers ’ speeches

sector. in times of economic crisis, continued access to finance for small businesses is essential. they are at the heart of the economy. development finance must operate counter cyclically, which means fighting the credit crunch around the globe, in particular in emerging europe including southeast europe, and that is exactly what efse does. but apart from this financial dimension, efse is still taking on other roles in contributing to financial sector development in southeast europe : we appreciate efse ’ s role as a responsible investor. as such, efse promotes responsible lending practices in the region, refraining from promoting consumer lending or speculative activities. why is this crucial for financial sector development? the financial crisis was in part caused by irresponsible lending practices, in particular by credit technologies employed in the subprime market, the very origin of the current crisis. against this background, there is indeed the valuable lesson to be learnt that responsible finance is a must to ensure a sound financial system. last but not least, i am proud to say that i, as well as my other colleagues from the central banks of the efse partner countries, are all members of the efse advisory group. as such, we are involved in efse ’ s work. but it is more than a sole advisory board, serving efse as an information source to stay abreast of financial sector developments in the region from a policy maker ’ s perspective. it provides a platform for regional exchange on financial sector issues. thus, it is a crucial vehicle to strengthen integration and cooperation in southeast europe, which in these current times of turmoil has never been so important. no southeast european country has the resources or the means to make it out for the current crisis alone. thank you for your attention.