Countries can do most of the work themselves. Private currency mismatches can be reduced through effective supervision, and measures to enhance the liquidity of local currency funding markets are essential. Ultimately, sound monetary policy, sustainable fiscal policy, and robust financial supervision and regulation are the best defences against crises and contagion. Conclusion The world’s economic centre of gravity is shifting.
The effectiveness of the international monetary and financial systems will determine how rapidly this change will occur and how sustainable it will be. 6  BIS Review 116/2010  The current outlook is for continuation of a modest global recovery, balancing stronger activity in emerging market economies with weaker growth in some advanced economies. However, there are non-negligible risks on the downside.