on international governance issues, a private sector funded organization operating under the auspices of columbia university. the meeting of 6th and 7th may was held in rome in partnership with luiss university, italy. technological advancement will also be important. on - line real time reporting should be the objective, so as to avoid regulators learning about crises after the fact. common themes identified the need for national authorities to take a greater role in regulation while at the same emphasizing the importance of international cooperation has been one of the frequently repeated messages coming out of the financial crisis. another has been the need to mitigate pro - cyclicality, the need for reform of the international financial institutions and the need to strengthen the macro prudential role of the imf. a greater level of consolidated supervision and the need to include insurance companies, broker - dealers and bank holding companies in the supervisory framework where this is not yet the case, were also emphasized in most reports on the crisis. maintenance of liquidity under stress conditions and the need for review of accounting standards, particularly the mark - to - criteria were other areas identified by may studies. there are however a few areas which need to be further examined and developed. bailouts and rescue packages and implications for regulation many studies have identified the critical regulatory weaknesses in the operation of the major financial institutions and more importantly authorities have taken steps to correct the immediate problems at the operational level. rescue packages have helped to encourage the return of stability to the system, are intended to urge the opening of the credit markets, and slow the widening global recession which has been a consequence of the collapse of the financial systems in us and europe, with consequential effects around the world. while this is critical, it is important and urgent to improve regulatory oversight and to ensure that the remedial measures are both appropriate and implementable. rescue packages will help the immediate problem but they are not preventative going forward. in addition, it is important that financial institutions do not start to expect to be rescued and that there does not develop a danger of their failing to take corrective action on their own without reliance on the regulator or the monetary authority. speed in putting corrective regulatory measures in place issues such as the large size of mega financial institutions and adequate capitalization in the financial industry remain matters which need to be addressed as a matter of urgency. while these matters have been flagged, actual corrective measures have not been put in place with a long term perspective, but have been mostly stop - gap measures.

representation than the financial stability forum. in this regard there is a question of the scope of the board. there is an interesting issue which begins to emerge from the first correspondence coming from the financial stability board which gives the impression that their mandate includes the cross - border activities of firms. it seems important to clarify whether theirs is a mandate which extends beyond banks to the wider corporate world. it is however true that globalized mega - corporations can become weak links in an increasingly interconnected world, and that the same kinds of issues that arose in global banks could arise in global corporations in the real sector. this leads to the question of cross border flows and the authority to deal with these issues. it is not clear how the financial stability board will move from problem identification to implementation of recommendations without being given greater authority. a greater role for emerging markets : the asymmetry between cost and control the emphasis in the regulatory world has been on the systemically important countries. however, the example of the last six months has shown that though it was the most systemically important country which created the problem, it affected the entire world. this is vindication of the argument that developing countries should have a bigger voice in setting supervisory standards, because when they fail, developing countries are seriously affected even though they had no part in the construction. gradual steps are being made in recognition of these facts and more is expected. however, it brings us back to the question of legitimacy, voice, representation and ensuring compliance. is disintermediation increasing? there are small signs that the post crisis period has been seeing an increased level of disintermediation where brokers are bringing the larger borrowers and lenders together and where traditional banking arrangements are being avoided. it would seem that this has even greater risks than the institutional approach, since at least they were guidelines and provisos, whereas in private party contracts, the parties are just covered by the law of contract and other very generalized rules governing setting and fulfillment of obligations. this must be watched. over - regulation as a possible over - reaction one concern coming out of the collapse of the financial system in us and europe is that just as in the post enron situation, there was a perceived over - reaction in the form of the sarbanes oxley legislation, that very shortly there could be an over - reaction in the financial regulatory domain, and that this could have adverse implications for financial liberalization and financial innovation. it will be important that we learn from that