These initiatives are welcome insofar as they go in the same direction and entail a more accountable system with an appropriate factoring-in of negative externalities. The Fund’s efforts to modernise its surveillance practices is welcome. Adopting a “multilateral perspective” towards bilateral surveillance which systematically analyses inward and outward spillovers is one of the “surveillance priorities” 6 identified by the Fund for the 2008–2011 period.
This is, I think, a realistic goal but it does have some prerequisites: Greek banks for their part need to accelerate their process of modernization, especially by rapidly expanding the use of low cost electronic means of payments, and increasing the offer of sophisticated bank products, while improving their risk management techniques in line with Basel II.