Press Release No. 08/244

Press Release: IMF and FSF Convene High-Level Meeting with Advanced and Emerging Market Economies on Financial Turmoil and Policy Responses

October 9, 2008

The International Monetary Fund (IMF) and Financial Stability Forum (FSF) co-sponsored today a high-level meeting on the recent financial turmoil and policy responses to promote discussion and interaction with senior officials from central banks, finance ministries and financial supervisory and regulatory agencies from a large group of advanced and emerging market economies.

U.S. Treasury Secretary Hank Paulson led off the meeting with informal remarks. The meeting, which was co-hosted by Mr. John Lipsky, the IMF's First Deputy Managing Director, and Mr. Mario Draghi, Governor of the Bank of Italy and Chairman of the FSF, was held at IMF Headquarters in Washington DC.

"Since the onset of the turmoil, there have been extraordinary liquidity and solvency strains in the financial system," Mr. Lipsky stated. "Our discussions today provided an opportunity to review the main challenges and risks faced among mature financial markets and to analyze the impact and key transmission channels to emerging markets. This session will contribute to the ongoing process of drawing lessons from the current turmoil and strengthening cross-border coordination, while deepening the relation between advanced and emerging market authorities. The IMF will continue to work closely with the FSF and emerging market countries to address the most urgent risks and help strengthen crisis preparedness across our membership, and, over the longer term, help build stronger macro-financial frameworks."

Mr. Draghi stated that "In April this year, the FSF launched an articulated plan to build a more resilient financial system, which draws on a joint diagnosis and an intensive collaborative effort of the main international supervisory, regulatory and central bank bodies and national authorities in key financial centers. The guiding principles underlying the recommendations in this plan are to recreate a financial system that operates with less leverage, is immune to the set of misaligned incentives at the root of this crisis, where prudential and regulatory oversight is strengthened, and especially where transparency allows better identification and management of risks. These recommendations are now being implemented by the same authorities that have formulated and agreed them, and the FSF is closely monitoring the implementation progress. Interactions with emerging market economies are important to develop robust arrangements for dealing with stress in the financial system. We will intensify our cooperation with the IMF and G20 in building a multilateral approach to systemic reform."

The high-level meeting included officials from Algeria, Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, India, Italy, Japan, Republic of Korea, Mexico, the Netherlands, the Russian Federation, Saudi Arabia, South Africa, Spain, Sweden, Switzerland, Turkey, United Arab Emirates, United Kingdom, United States and Venezuela. In addition, representatives from the Bank for International Settlements, the Basel Committee on Banking Supervision, the Committee on the Global Financial System, the European Central Bank, the European Commission, the International Accounting Standards Board, the International Organization of Securities Commissions, the Joint Forum, the Organization for Economic Cooperation and Development, and the World Bank, also participated in the meeting.