financial instruments. as already underlined on the occasion of previous hearings in front of you, this calls first for much more transparency, without any consideration of vested interests ; second for much less short - termism in the decision - making processes, contrary to the most recent trends ; and third for a systematic elimination of the procyclical aspects of our regulatory, prudential, accounting and taxation rules, which are amplifying considerably the fluctuations that are inherent in the functioning of market economies. the financial stability forum ( fsf ) has identified the main avenues for such reforms. what we now need is strategic lucidity and, where appropriate, a great deal of political energy to counter considerable vested interests. the g20 and the imf are and will be decisive in this respect. but a much better functioning of the financial sphere does not suffice. we also need sound macroeconomic policies that are sustainable in the medium and long run. in particular, we need to avoid the creation of the large domestic and external imbalances which are very much at the root of the present difficulties. an effective surveillance of macroeconomic policies of the major systemically important economies is of the essence. only the imf can perform this decisive function, provided its mandate is strengthened. in terms of institutional set - up, we need two major improvements : • first, the international financial architecture requires a strengthening of the informal groupings, in particular the fsf and the g20. the fsf is unique in that it links all the authorities and institutions that have a systemic influence on financial markets, which are very largely decentralised and – for many of them – independent from the political sphere. the necessary enlargement of the fsf is key. particularly important in a time of global crisis has been the new authority of the g20, which is a truly global informal grouping in comparison with the g7, which itself continues to be useful in a situation where the turbulence comes from the industrialised countries. • second, on top of the imf ’ s strengthened surveillance mandate, the governance of the international financial institutions, particularly the imf but also the world bank, should become more effective and representative. in particular, a full representation of emerging market economies, commensurate with their importance in the global economy, is indispensable. * * * by way of concluding my introductory remarks, i would like to stress two points. first, as regards euro area policies, persistent wage growth

the exchange rates and the prosperity of the global economy that chairman ben bernanke, treasury secretary tim geithner and president obama underline “ that a strong dollar is in the interest of the us ”. i trust that it is not only true but that it is also very important for the global economic stability. ” which limitation to boni do you favour? “ i ’ m in agreement with the fsb terms of reference which seems to me very appropriate. seen from a central bank perspective, what is decisive is that the boni should not create incentives for taking absurdly high levels of risks that would materialise in a crisis of the type we are experiencing. the main problem, seen from our perspective is to be sure that the structure of remunerations is conducting to sound and wise decisions justified in the medium and long - term. ” are you satisfied with the commission ’ s proposal for the european surveillance system? “ the commission has now presented its proposals to the council, which is under the swedish presidency. as regards the ecb and its general council we stand ready to do all what we can for the european systemic risk board to fulfil its very important systemic responsibilities in the best fashion possible to the service of the european financial stability. ” are you satisfied with the outcome of the g20 meeting in pittsburgh? “ as this stage i would only make three short observations : first, we central banks appreciated that it is said that “ a sense of normalcy should not lead to complacency. ” second, i noted that it is also in the preamble that “ we will prepare our exit strategies and, when the time is right, withdraw our extraordinary policy support (.... ), maintaining a commitment to fiscal responsibility. ” third, it is particularly important that the g20 is designed to be the premier forum for international economic cooperation ; that the imf is asked to play a key role in the multilateral surveillance, that the financial stability board includes major systemic economies, and that the communique welcomes the key measures agreed by the oversight body of the basel committee. ”