While strengthening vulnerability assessment is an important element of the surveillance process, the fundamental objective of surveillance is to review and analyse macroeconomic policies for ensuring the soundness and stability of the domestic as well as the international monetary and payment system.
The increasing complexity of financial markets have rendered the existing instruments of surveillance such as Article IV consultations, Financial Sector Assessment Program/Financial System Stability Assessment (FSAP/FSSA), and Reports on Observance of Standards and Codes (ROSCs) less effective than what was assumed so far, in identifying and preventing crises.