The involvement of the private sector should limit moral hazard, strengthen market discipline and improve the repayment of loans. The fifth area of reform concentrates on the prevention of systemic instability. Most of the international best practices and codes have been established to minimise the effects that the insolvency of a financial institution may have on other institutions.
In addition, the IMF has created a Contingent Credit Line facility as a precautionary defence for countries with strong economic policies. This facility has been designed to prevent the balance of payments problems that could arise from international financial contagion. South Africa has been actively involved in discussions on the new international financial architecture.