in their ongoing operations. in addition to a range of tactical steps, such as enhancing security measures, updating communication plans, and strengthening real - time data backup, institutions also are making some interesting strategic choices. for example, many institutions use a traditional model of business continuity that is based on an " active " operating site with a corresponding backup site, often with separate sites for data processing and for business operations. this strategy generally relies on relocating staff from the active site to the backup site and on maintaining backup copies of technology and data that are up - to - date. in the traditional model, backup capabilities are ensured through periodic testing. even so, maintaining the effectiveness of backup sites, staff, and systems that are not routinely used for production is often difficult. for example, during the week of september 11, many institutions found that disaster - recovery plans of particular business lines were not always accessible or up - to - date, and sometimes the backup and primary sites used different hardware and software versions. finally, the assumption that key personnel could be relocated was not always well founded. in contrast, some institutions are now moving toward a " split operations " model, in which two or more active operating sites provide backup for one another. each site can absorb some or all of the work of another for an extended time. for banking organizations with nationwide operations ( particularly those that have grown through mergers ), such sites are often hundreds of miles apart. for international firms, routine workloads can be shared among sites in different countries or different continents. this strategy can provide almost - immediate resumption capacity, depending on the systems supporting the operations and the communications and operating capacity at each site. the strategy also addresses many of the key vulnerabilities of the traditional model. for example, technology must be kept current at all active operating sites for normal business operations to proceed. at the same time, the split - operations approach can have significant costs, in terms of maintaining excess capacity at each site and of adding operating complexity. this approach may be more suited to some types of business activities, such as trading, clearing, and settlement, than to others. other business - continuity models may be able to provide a high degree of resilience. over time, technological change will significantly affect the range of business continuity strategies and, importantly, their relative costs and benefits. whatever operating model they chose, financial institutions clearly are reassessing the range of scenarios they need to address in their business - continuity planning. such

- interest banking capital, particularly short - term capital. i am glad to inform you that these three broad principles have guided us in india during the 90s in the management of our external sector, particularly after the asian crisis of 1997. the results have been extremely positive. we have doubled our foreign exchange reserves in the last three years - and increased them several times over since the beginning of the 90s. they are now adequate to take care of all reversible capital flows as well as current account deficits, and are more than required under the conservative “ guidotti rule ” ( which suggests reserves coverage for one year ’ s capital account liabilities ). india ’ s short - term debt is also very low - and central bank ’ s forward liabilities have been reduced to less than 1 per cent of reserves. this has gained us the confidence of the markets. this has been more than evident even during the recent period of uncertainties. similarly, we have a flexible but managed exchange rate system. according to the latest assessment by the imf and other authorities, our exchange rates have been less volatile than other emerging markets. our exchange rate by any criterion of competitiveness is also believed to be broadly realistic and competitive. we have also witnessed a substantial increase in capital flows particularly foreign direct investment, and much greater confidence by foreign investors in our macro - economic stability. finally, and the fourth point that i want to make, is that international institutions and international community must play a supportive role in resolving a crisis whenever it occurs. for an agency, such as the imf, to play such a role, the essential requirements are : • a substantial increase in its lendable resources in line with increase in the size of international capital flows in the 90s. • a greater automaticity in the availability of finance, subject to a country following reasonable macro - economic policies. the best way to achieve this objective would be to make imf facilities “ automatic ” provided the annual article iv consultations with the country have been positive and favourable. • a third requirement is to provide developing member countries with a much larger voting power than now. it is one of the ironies of the last forty years that, although developing countries as a group, have grown much faster than the developed countries and their relative economic strength in terms of output and trade has increased substantially, their actual voting power in bretton woods institutions has tended to decline! to sum up, let us recognize that the present bretton woods international financial architecture was not equipped