This is critical if the financial system is to carry out its vital role of helping to match savings with productive investments. The financial system can also support confidence by giving households appropriate access to credit. So it is essential that emerging-market economies have sound and efficient banking systems. The Asian crisis of 1997-98 illustrated this point clearly.
International institutions, such as the Financial Stability Forum, have been working on this issue. While a number of  2  BIS Review 50/2005  emerging-market economies still have some distance to go, I am happy to say that we have seen some progress in many countries over the past few years. Finally, appropriate monetary policy is very important.