To mitigate the volatility of capital flows and especially short term flows and reap the benefits of capital account liberalization, one should adopt a risk management strategy that involves a system for monitoring and assessing the risks and liquidity of the economy as a whole, including at a sector level. The international community may assist in developing best practices related to reserve and debt management: let me quote for example the more stringent publishing obligations on net foreign exchange reserves adopted within the context of the IMF Special Data Dissemination Standard (SDDS) or the IMF and the World Bank initiative to promote good practices in reserve and sovereign liability management. 1.2  Clarify the principles governing crisis resolution and the distribution of roles among actors  I would like to give you my views on two issues at stake which are of great importance and strongly inter-related, i.e. the role of the IMF and the involvement of the private sector. 1.2.1  The IMF should remain at the centre of the process for crisis resolution  Whatever the prevention features, crises will still occur in the future. In that respect, I would like to focus on the roles of the IMF as regards both international lending and crisis management. -  As regards its lending role, in my view, the IMF cannot act as an international lender of last resort. First, it has only limited resources that can not match private capital flows; second, the perception of such a role would increase moral hazard.
There is probably some merit in an overall review of regulatory, accounting and tax rules and regulations, as well as of codes of good conduct and good practices, and of structural developments of market themselves, to identify possible amendments and improvements that could help protect and enhance the behavioural and conceptual diversity of modern financial markets. 6  BIS Review 49/2001