where the emphasis is on possible ways of creating a more orderly environment for restructuring external debt, on principles to guide the restructuring of banking systems in the wake of a crisis, and on handling corporate insolvency. much of this work involves international institutions like, for instance, the international monetary fund, the world bank, the bank for international settlements, the basel committee on banking supervision, and the oecd, as well as the newly created financial stability forum. governor backstrom is also chairman of the board and president of the bank for international settlements. before becoming governor of the riksbank in 1994 he was state secretary in the ministry of finance with responsibility for fiscal and financial affairs, which included the responsibility, under the minister, for the handling of the swedish banking crisis in the early 1990s. however, the work, often hard, of implementing policies and codes lies with national authorities. these measures will contribute to improved financial stability only if countries actually adopt and implement them. a crucial ingredient in achieving this is of course to involve countries, formally or informally, in the development of the policies, codes and standards. but even if that is achieved, i know from my own experience how difficult the actual implementation sometimes can be, not least for political reasons. i would also like to make the point that today ’ s favourable trends in the world economy should not lead us to conclude that the danger is over. instead, policymakers throughout the world must continue to work on forestalling new problems both because some evident threats to international financial and economic stability still remain and because there may well be vulnerabilities that are not so evident. the run up to the financial turbulence of the 1990s during the past twenty years, the financial systems in many countries have been deregulated. for the first time since the outbreak of world war one, capital can again pass more or less freely across national borders. moreover, major changes in communication and information technology have paved the way for new instruments and methods for risk management. taken as a whole, this has led to the financial system being more extensive and global today than ever before. this holds even though capital flows relative to gdp were also large at the end of the last century. the rapid financial development and internationalisation are per se a logical consequence of the production of goods and services being globalised, with a massive increase in cross - border trade. they also have to do with growing wealth in many parts of the world. this in turn has increased the need for

on this as regional cooperation looms large in the african monetary cooperation programme that you have embarked upon. today, all countries – rich or poor, big or small – are confronted with the various challenges thrown up by globalisation. smaller countries face bigger challenges and even greater risks, as we know only too well. we have to reckon with unpredictable external shocks, such as oil price hikes, drop in the export price of our commodities, or of our manufactured exports. how should we react in the face of globalisation? should we, like one latin american country did last week, pull out of the imf and the world bank? it would be disastrous to envisage such a scenario on our continent as most of our countries are still indebted to these institutions, which for all their imperfections, have done a creditable job. of course, we are not denying that there is considerable scope for achieving a better and more equitable international financial architecture more suited to the needs of our region. faced with the challenges stemming from globalisation, we have to build greater economic resilience into our economies. turning our back on globalisation is not an option. protecting our markets and insulating our labour force from competition can buy short - term peace and create the illusion of growth and welfare. sustainable growth does not lie in that direction. burying your head in the sand was never a good strategy. nations across the world are integrating their economies with those of their neighbours, to create larger and more competitive regional economic groups, and to engage in international trade – not as individual states but as regional powers. in africa, now more than ever before, regional economic cooperation and integration has become a necessary condition for longterm sustainable development. it is in this context that we must focus on the objectives of the african monetary cooperation programme. this programme requires us to adopt collective policy measures to achieve a harmonised monetary system and create a common management institution. the harmonisation of the monetary cooperation programmes of the various sub - regional groupings constitutes the first stage. these will then serve as building blocks for the single african monetary zone, which we expect by the year 2021, with a common currency and a common central bank. to move in this direction, the aacb has adopted a set of quantitative macroeconomic convergence criteria, that should be observed by at least 51 percent of aacb members, before we can launch the african monetary union. there are some encouraging signs. growth performance during the last three years in sub