“I think that important inroads have been made to develop a holistic/systemic approach to surveillance in the last year. This is well attested in the findings of the new IMF surveillance reports (i.e. spillover reports, pilot external reports and ad hoc assessment of policy spillovers for specific area of activity, such as for the measures for managing capital flows). The MAP is a further step in the useful direction of ‘connecting the dot’s across markets, sectors and countries. Furthermore, increased inter-institutional cooperation (in particular among the IMF-FSB-BIS) has also improved the quality of the analyses that policy-makers may rely on to understand the global economy and the interconnectedness among its various parts.

In spite of these important developments, my overall judgment does not cross the threshold of ‘minimal progress’ because current achievements have been offset by weaknesses in other areas. For instance, in spite of the important progress in developing systemic surveillance analyses, the new surveillance does not appear to be based on more solid ground than its predecessor. In particular, no mechanism has been develop to redress the biggest weakness in international surveillance – namely, its inability to have traction over systematically important countries. In short, although we may now be more optimistic about the quality of surveillance analyses (and, in particular, about the required focus on spillovers and interconnections), I doubt that these improved analyses will ever be able to heed remedial political action at the domestic level should the need to act arises. This is especially the case if the surveillance findings (and the attendant policy recommendations) will clash with domestic economic choices and interests.

Finally, my over judgement is negatively influenced by the continuing inability to fill in one of the most serious gap in the international financial architecture, namely the development of a sovereign debt restructuring mechanism.”

“International efforts in this area are particularly disappointing from my perspective because international cooperation on financial regulatory issues has been hailed as one of the building blocs of the crisis management response since the early 2008 at least. In other words, international meetings/communiqué/actions in this area have raised high expectations of significant change. As we know, however, the higher the expectation, the biggest the disappointment. This is exactly what I think has happened over the past year. As the centre stage of the crisis continued moving from the financial sector to the real economy, financial regulation has somewhat lost its urgency with the result that the international reform agenda has been slowed down, most notably in the area of the OTC regulation as suggested in this survey. But serious risk for international financial cooperation also stems from an increased fragmentation of approaches between the US and the EU. A rift in two key financial jurisdictions does not bode well for the international efforts at regulating financial markets and products...

Cross-countries regulatory variation is also an issue that is worth looking at more closely in the coming months. That is to say, if up to now much attention has been devoted to issues related to rule-creation, in the next months, the main problems will be those related to the implementation of international decisions. Domestic political-economy specificities (regulatory structures and cultures to name just a few) may well interfere with the implementation of international commitments and thus contribute to international regulatory fragmentation.”