So what can we do? An economic policy that is credible in the long term is, as I said earlier, a very important ingredient in this context. But it is not enough. Rules and institutes that contribute to financial stability are also necessary. This is why international organisations such BIS, IOSCO and the OECD are working to  4  BIS Review 26/2001  strengthen the financial system in various ways. In total, the work covers a dozen different areas, from overseeing and supervising the financial system to observing individual countries' economies and regulations for credit institutes. Allow me to briefly mention, in this context, the capital adequacy regulations worked out by the Basel Committee, as I feel this is a good example of how we can work internationally to create regulations and institutes that contribute to stability, without preventing the important, healthy risk taking. The Basel regulations mean in principle that the greater the risk a bank takes, the more capital it should hold. As capital costs money, the Basel regulations lead to the banks reducing their risk taking. This in turn reduces the risk of bank crises and other disturbances that would have a negative effect on economic growth arising in the financial system. If this is to function, it requires a broad geographical support, which it has. The Regulations from 1988 are applied in more than 120 countries. The Basel Committee has proposed new regulations, which are an extension of the current ones.
Personally, I believe that it will be easier to arouse interest in a discussion based on facts, when the euro banknotes and coins appear next year. Globalisation requires stable game rules After this in-depth foray into the world of the euro, I shall return to the more general issues following on from the current internationalisation process. This creates, as I said earlier, the right conditions for a more rapid economic growth, but it does not offer any guarantee that this will be the case and it is important to remember this. The Swedish economic crisis at the beginning of the 1990s is still fresh in most of our memories. That experience provided a clear illustration of the importance of pursuing a long-term, credible economic policy. However, it also showed the importance of building up properly functioning institutions to oversee the financial markets when deregulated. In Sweden it was evident that the supervisory authorities were not prepared for the reality that would prevail after the deregulation of the credit markets in the 1980s. Similar conclusions can be drawn from the crises in for example Mexico and Asia. These also show clearly that countries wanting to participate on the international capital markets must meet the requirements for openness and provision of information.