The Fund would concede on hindsight that: (i)  it lacked sufficient appreciation of the workings of international capital markets and as such underestimated the speed with which funds would flow in and out of open capital markets;  (ii)  with its excessive focus on fiscal policy, it paid inadequate attention to the importance of the soundness of financial systems and the propensity that these had for spreading crises;  (iii)  it showed excessive zeal in encouraging countries to open up to short term foreign capital, without recognizing that the volatility of these flows could have devastating economic effects;  (iv)  it could have put more emphasis on poverty alleviation and the need for social safety nets in periods of adjustment; and  (v)  it needed to improve its understanding of institutions and political dynamics in member countries.
For example, it cannot be ruled out that single monetary policy decisions may sometimes be channelled to countries in a non-uniform manner on account of the fact that the financial system of the euro area – that is, financial institutions, markets and the infrastructure – are not yet fully integrated in all aspects.