completion. and then the question is how to ac >> of course in many countries, the top priority will be fiscal consolidation. because the main consequence of the crisis is an increase in debt-to- debt-to-gdp ratio and the risk of inflation is rather low, i'm not saying there is no risk but it is low and the monetary policy can afford to stay loose for some time. and the focus has to be put on fiscal. which doesn't mean, again, that fiscal consolidation everywhere has to start today. because then, we will go back in the risk of a new downturn. but, it means everywhere, the problem is to prepare the fiscal consolidation, to make it transparently and markets need to know the government had planned, they had the right forecast for the coming years so that the problem will be

addressed. and, for instance, there are many fees, liken entitlement programs and you can prepare things, the effect of which will come only in a couple of years. so, prepare now, but, depending where you exactly are in the cycle, implement now or implement later and in other countries, mostly those where, which didn't face large bank bailout costs, the problem can be different. they don't have such an important fiscal problem in front of them and so the monetary tightening can be the first step, and several economies already have -- are following this route including australia, china, israel, india, big economies, small economies.

they already started withdrawing monetary support and are beginning to narrow the amount of liquidity which has been put in circulation to face the crisis. of course, all of this needs some international cooperation. because everybody understands that what you are doing in your country, affects the other countries, and so if it is really clock work to try to know the right time to exit if you don't take into account what others are doing you have no chance of success and of course it is more difficult to have the cooperation now than when all the g-20 leaders were scared and i remember the meeting in london in april, where you had the 20 -- in fact more than 20 because the g-20 is always a little fatter than 20 but you had 23, 24 heads of state or heads of government around the table and they were so scared, they were

likely to do everything and were the best people in the world and when the crisis disappeared which of course is good news, everybody goes back to his own domestic problem which is understandable, and then the will -- i won't say it has to tote -- has totally disappeared. hopefully not but is not as strong as before, especially, when it has to last very long because the time to exit is a one-time districts something which will take months depending on the countries, so, international cooperation is as important in the exiting strategy than it was in implementing the stimulus and huge amounts which have been used to rescue the financial sector and is a bit more difficult to manage it than was the case last april, even last september. now, let's turn to my second

point in challenges of 2010 after securing the economic recovery, the second part has to do with unemployment and the social costs of the crisis. here the point is in -- in advanced economies, the risk, i say bluntly, a jobless recovery, the risk is a recovery where growth will be back but not jobs. and of course, the problem then as i said before, are not -- problems then as i said before are not only economic problems but in many countries, advanced economies, more in emerging or low income countries, social problems and beyond the social problems, some demographic problems with social unrest and beyond the democratic problem you may also have some problems which may go to the question of war or peace and we have a lot of examples in the past where

social -- economic instability leads to session instability and social instability to social unrest with a lot of possible consequences and the question is not only the question of fixing the economy which is the main problem but also, to do it in a way that will not put all the burden on one part of the population and the problem of unemployment is clearly one of a good example for that, which may create some countries, especially the countries where democracy is not as strong as others because it is human, which may create a lot of political problems. that's why our advice at the imf is to use the part of the stimulus we already -- already has been decided and which will be effective in 2010, to try to focus it to support employment. and reinforce the social safety net. we did that, ourselves, on a smaller scale, of course, the

programs we have in different countries where we are helping and that is probably one of the big differences, the new imf and so-called old imf which is that -- only we are trying to put countries on the right economic path and give the right economic advice as good as we can and not only do we provide resources to have to do this but at the same time we pushed the country to put in place for one part of the deficit which we agreed together to forecast for, next year, for instance, and take a little part of it to improve the social safety net, to create the... where it doesn't exist because the most vulnerable are always the ones which are most impacted by these kinds of programs and for instance, from ukraine to hungary and pakistan to other countries, there is always something which looks likes 0.3, 0.5, 0.6% of gdp in deficit

which is directly earmarked to be used to have the population and the most vulnerable part of the population to cope with the crisis. now, the third priority, is to keep up the momentum on the financial sector reform. and that's a real concern. what i said before, about the difficulty of keeping the consensus and the national cooperation, why the crisis happened is even stronger, looking at the financial sector reform. a lot has been said during 2008 and 2009 about the need to do something, the lessons of the crisis, are very clear, failure and regulation, even more, failure and supervision of the financial sector. we need something which is

stronger, even more than stronger we need something that is smarter, fine, but the problem to do that is not only to design it but to implement it and that's a long story. the financial stability board, does a very good job with a lot of input of the imf already and some important reforms have been implemented but there is a lot to do and in my view two priorities, once has to do with systemic risk, the so-called too big to fail problem and the other one which is directly in our backyard, in the imf which has to do with a cross-country crisis resolution and that is a difficult problem because you may have the best system and they don't cooperate and then you have the problem -- what happened in one country has an effect on the other country and may be the biggest source of

troubles. so at least on these two questions, cross-border issues and systemic risk, i think we still have a lot to do. the political will is still there. but it takes a long time to do things like that and will the political will last long enough? i don't know, just for you to remember, the so-called bad-'02 rules took 12 years to be defined and implemented, 12 years and some, who still have in mind the work done for the question of fair accounting and mark to market value, and said it took 30 years to convince everybody to go there. so we don't have 30 years, we don't even have 12 years. we have 12 months or 24 months to be able to set up something which would be, i won't say totally safe.

totally safe financial sector doesn't exist but at least safer, and more likely to resist and to avoid kind of the kind of problem we just had. of course, you have a lot of questions or there is the question of the costs. it's a question of fairness, we cannot afford a system which privatizes the gains and socializes the losses and everybody agrees with it, fine, how do you do that? already the cost of the current crisis, and looking forward, how do we do to be able to address the problem of -- if another financial crisis takes place five or ten years from now, nobody can say it is impossible or won't happen. and, i'm convinced that most parliaments, the congress here in the u.s., the national assembly in france, westminster in the u.k. and others, will be very reluctant to say the least,

to give money again to the financial sector. especially when they see how the financial sector behaves just at the aftermath of the crisis. bonuses, and all this kind of thing and the real problem is the following. i see no -- at least in developed countries, likely to come back during the constituency five years from now and say you know you guys you have to pay again because the financial sector is again in the mess. and so if we are convinced of this we absolutely need to find the process -- first of course to try to decrease the risk of such a crisis, but, also, to create the resolution process, which will be here -- here at this time without going back to the traditional way of asking taxpayer money. and that is a question which is at stake when people are talking about a contribution of the

financial sector, to -- for the kind of insurance system and fund which will be useful in due time. again, it is i think a rather good idea, we are working on that. the g-20 has asked the imf to provide a report on this question for april. and we will. and it's a very tricky question, you can understand, and there are a lot of constituencies, having different opinions, and the bankers, of course, the banker's opinion is clear but the other constituencies and the problem is difficult, but is a problem we need to solve, going back to business as usual is absolutely impossible, and will be putting the whole system at risk. i don't know when, maybe in two years, maybe only in ten years, but, it will be totally unreasonable to believe we'll never again face the risks of a financial crisis and we absolutely need now to build the tools to address these kinds of

problems. so, i come now to my last point, i have been too long already i'm afraid. i wanted to say a few words of the priorities not for the year but for the decade and let me limit myself to two of them. one has to do with so-called look for, search for new sources of growth, and the second, to one point i already said a few words about, several times, in my remarks, which is international cooperation and collaboration. under new sources, the problem is well-known, the u.s. household saving rate is increasing. probably as a response to the crisis, because people are scared, too, don't right lie as much as before on credit and want to save more.

if it's a short-term problem -- or a short-term change in behavior, fine. has no importance, but i don't believe so. many economists do believe it will change, and we're already at 6 or so percent of gdp in savings rate which has not happened for years or decades and many are expecting that the 6 or 7 will become, 7, 8, 9, why not 10. so what they're consequences? good news as always and bad news, good news, it is good for the deficits, of course the more the household will save, the more it will help to fix the problem of the domestic deficit and as a consequence of the current account deficit and that is good. on the other hand it means less consumption, and as everybody knows, the u.s. consumer has been the main mortar of the main trigger to growth during the last decade and if he disappeared or if he is weaker

who is going to replace the u.s. consumer in the global growth? the answer is not that obvious. everybody turns its eyes to asia and says, emerging markets, asian countries will consume more and will offset the decrease in the u.s. consumption. it is not that easy. first, it is the not obvious that the increase in the emerging markets will grow that fast and second it is not the same kind of goods and for a lot of reasons you cannot just try to offset one by the other one so easy. so the question of new sources of growth is really, really at stake. that's why the g-20 set up what they call the framework for strong, sustainable and balanced growth which is a new process where, basically the imf is asked to provide analysis, resources, taking out the data from other countries and putting

them together and looking at the consistency between what the chinese want to do in the coming years and the u.s. and the europeans and japan and of course seeing that it is inconsistent and so that the policy has to be changed to make it consistent because if it goes in... then we're sure we will have made a disruption in prices, so trying to deal together with this problem. so we started this process and in the month of january we are collecting the data from the different countries and will provide the first run of this exercise for the finance minister g-20 meeting in april in washington and then will go to the leaders in june and fit works well -- it has to work well -- it will show what goes well and what in the global economy is impossible to show what has to be changed and

hopefully the government willing -- have enough good will to say, okay. we have to make an effort, the effort has to be shared, the burden-sharing problem will be of course very difficult but everybody facing the fact that the decision made by the different actors are not consistent, it -- a decisions will have to be made to try to avoid different possibility of crises. so the idea is strong, as i said strong, sustainable and balanced, strong growth, means where are the new sources of growth, and, certainly, in developing and emerging countries but again it doesn't match that easily and also you have the discussion about green economy and new sources of this but there is a long way between speeches of the green economy and the fact that really -- it really produces jobs. then you have the sustainable question, which is directly linked to the fiscal problem of many countries, the fact that the -- the same time we are looking for new sources of growth and have a huge debt

problem and to fix the problem, requires measures which of course, exactly the positive direction, but the one you want to force the growth and the last point of course is balance. because that growth, new growth, the new growth model -- the other one is obviously dead -- has to be more balanced if we want to avoid other imbalances and disruptions between countries having huge surpluses and everybody thinks of course about china and the huge deficit and everybody thinks about the u.s. and they are not the only examples, but are the biggest two, and we may have a win-win situation in which a more stable international monetary system and more sustainable global growth model could be put in place but of course it relies upon the kind of cooperation at least all the big economies, the ones which are in the g-20 and

that is my second point on the question of global cooperation. the recent experience gives great hope. we have contemplated, unprecedented cooperation. it never happened in the history of mankind that all the countries at the same time facing the same problem used the same tools and succeeded. it never happened. good. is it enough for politicians to go ahead? depends on the opinion you have about politicians. i think it's enough, but of course am not sure. and, the way this nation of the world put together to respond to this profound economic and potentially human calamity thus redeeming the promise of international cooperation, all of this in my view is one of the main outcomes of the crisis.

the g-20 has emerged and the main body, where this kind of discussion can take place. even there's a lot of discussion about the... who could be in, who could be out, nevertheless, it has worked and what i said before the so-called math, where all the dot will be collected and a simulation made and policy advice given by the imf is, i think, the major tool which has been created to try to make steps forward. it relies a lot on the imf and that's why -- my really last point, it requires also changes in the imf because the institution becomes a big part of the solution. already, a lot of changes have taken place and we have increased availability of our lending, we have created new

facilities like the flexible credit line for those of you who are more interested in details, we have an issue, 250 billion of special growing rights and that never happened in the past and clearly helpful for many countries during the crisis and the way we put in place conditions -- our program is stream lined and changed. a lot of things have changed but that is only a first step. next step are underway, but, they concern our mandate, the mandate which has been defined in 1944 is... it was about balance of payment gap, problem in currencies, only a problem of financial stability and economic stability today, obviously not. what about the mandate and what about the resources? resources have been increased by

the trouble in london last april and it's now done, we have the money. i won't say in the pocket but available. is it enough? well, it was absolutely necessary to do that, but, if we are facing in the future something even bigger, the questions has to be discussed. the lending facility, as i say, we improved them, right. did we do enough? what kind of new facility do we need to tackle modern crises and what kind of insurance can we give to countries, can the imf play the role of learned of last resort at the beginning of the ideas of the founders, and the fund never really implemented. that's also a question and the last question of course is the core business, bread and butter of the imf, which is the civilians business. and it has not been good enough and even if, if you look

carefully you can find pages and reports especially the world economic outlook of 2007 about the subprime market and so on warning about a problem... limited number of pages, we haven't been vocal enough and nobody could say the crisis has been foreseen clearly and we have to enhance our surveillance process, with early morning process, that we are just implementing now. looking more at macro financial -- this crisis is a cries of the ligatures between the financial sector and the real sector and there is no other institution likely to do that. there's a lot of institutions working on the real economy, treasury, around the world, and so on and you have a lot of institutional wo al workings in

financial sector but, at the main street and wall street, working on the ligatures of the two, and this crisis and possible future crisis will be crises of the linkages and feedback between the real economy and financial sector, so again our understanding of this at the same time as our understanding of cross-country spillover and the way acro cris is in one country or another country and that is change we have to make in the coming year, not to talk about the question of governance, and questions of quotas in the institutions and the voice and representation of the different parts of the world. so let me conclude. this financial crisis which erupted in the u.s., but spread like wildfire across the world i think really affected deeply the

way we think about economic and financial policies. and so, if i may say 2008 was a year of humility. our confidence in markets, institutions, and the status quo turned out to be complacency. and we learned how fallible, fragile and also interconnected we are. so, 2009 was a year of unity where an unprecedented international cooperation took place. 2010 has to be a year of transformation, where we complete the global project to address our failings in regulations, supervision, economic policy and global governance, that all failings, that lay behind this crisis.

and of course as i say, to do this, certainly, is a bit looking too narrowly to think the imf is the only institution which is at stake but because of the new rule given to the imf by the g-20 we certainly need to transform ourselves, to better serve or members but not only our members as was the case in the past, mostly in a bilateral way, the imf dealing with the u.s., with samoa island or with brazil or more in a comprehensive way because it is simple to say a bit naive but i think it's true the main lesson of the crisis is that we are really in a globalized world. before the crisis, all of us or most of us made speeches, declarations, wrote op-eds, even books, about the globalization, but, the idea, the fact that the global economy was really global

was an idea. the crisis showed that we are in a globalized world and so, there is no domestic response to global problems. we need to have global institutions likely to deal with global problems, and, that is really the work we all of us have to do, in an institution like the imf and many other institutions during the coming decade. well, sorry, i have been much too long. but nevertheless, i'm happy to answer any questions you may have. [applause]. >> thank you. >> thank you, for a very interesting expose, i'm... [inaudible] we've gathered together 8 questions for you. first question is... chamber of commerce, an understanding about the financial stability board.

>> well, you wants me to elaborate a little bit more? the financial stability board is something which has been created by the g-7 ministers. around the beginning of the year 2000. i was at this time the finance minister of my country. and the idea came from the president of the bundesbank and the main idea was the following, we had the imf and in the imf you have so many emerging countries, we better build something for ourselves to get rid of the imf and i said, fine, that's a good idea and let's do it and we created the financial stability forum which is

basically meeting of the most important central bankers, plus finance ministers, plus sometimes dealing with the private sector and very useful, to have this kind of forum where a discussion can take place and the decision was been made in pittsburgh in september we need to have a bit more formalized, and a change of name. it remains an institution which the -- the role of which is mainly to take together others. the institution itself is 15 people. but, to take people together, the international association of insurance on the other side and accounting and all these kinds of things including the imf and try to see together what kind of cross-experience we may have. so it's useful and of course there is overlap between what the fsb is doing and what the

imf is doing but not that much. basically the idea is that fsb has to think about regulations and provide the regulations and design the regulations and then if adopted they have to be implemented, and it goes to the national parliament and then comes the role of the imf which is to make sure it is correctly implemented in the countries and so we have a clear cooperation, again, always there is overlap and discussion about borders but basically it goes well. >> next question from... raise your hand when i call your name, the author -- yes. okay. can you comments on the imf's new mandate en financial market stability. >> yes. well -- yes, and no. we are trying to define a new mandate and we don't have it and it is difficult to say what will be in it i can tell you what i

wish and think it will be used -- and will it be accept it by the membership and how long will it take? i can't answer this. the idea is that when you come in the building of the imf, you did this already in the past, you see a lot of people very cleaver people, very well trained, hundreds, thousands, all having a degree in economics. then you say, okay, we are a society... how many market people do you have in the building? that is very hard to find and there are many reasons, one is the fiscal reason, the change which is rather new compared to the way the institution has been built decades ago. and the other reason is those guys are difficult to pay because i'm not saying the people in the imf are badly paid

but, it's hard to compete with wall street. and so to hire people, somebody having a big experience, these days is a bit easiary... [laughter]. >>... but to hire somebody having big experience in markets is not that easy. but, besides all of this, it was a question of the way of thinking about the global economy and what i said before we realize clearly what we have to realize is this linkages between the financial sector and the real economy, needs us of course to have much more market people and more, to be more active in providing analysis, ideas, in the way the financial market should be for some part regulated and managed, at least informed of what is going on. financial markets works only well with good information and basic one-on-one economies, and i'm not sure we can totally rely

on the kind of information which is given by rating agencies and others to provide for the market. the imf is not the only one but can be part of the new process, and you want the markets to be effective and we need the markets to have the best possible information which means more transparency and a lot of things like this and obviously, that was the big failure in the past. >> the next question from... [speaking french] do you have the intention as when you took your post in 2007 to go to the end of your mandate in 2012. >> what i like, my friend is he is a constant man, there is no meeting where we are together where he doesn't ask the same question!

and he won't be surprised i give the same answer! [laughter]. >> i have been chosen for this position for five years. and today, i have no intention to change. if your question is, is it possible that in the future you may change your opinion, then my answer would be a traditional american politician answer which is i don't answer to hypothetical questions. >> the next question from dorothy bandas, from dp media productions, can you please update us on the imf's efforts with haiti, debt relief, loans and other activities that will help the island as quickly as possible. >> yes. of course. well, i think all of you, we are all shocked by what happened in haiti. so, what we did in the imf, taking into account we are not

really the kind of agency likely to provide immediate help, what they need today, is people, hospitals, food, this kind of thing, the agency which -- agencies know how to do that and we are likely to provide resources. so, we have made a decision, to provide a new 100 million of fresh money to haiti, yesterday at the same time, the u.s. decided the same amount and it has to be a decision which is not only a decision by the managing director but the board and the board will meet in the coming weeks, not the coming weeks, coming week to make a decision, no problem. and, so, we will be able to provide the resources rapidly. beyond this, there is a question of at least suspending all kinds of repayment by haiti from debt, and that is a question of the club de paris, and they are working on this today, and

monday and i guess it will go well. but my problem is a bit beyond this. my problem is that this country is absolutely incredible but is regularly hit by a different kind of calamity, as others, food and fuel prices crisis but after the hurricanes and now this incredible earthquake and so i believe that -- and i'm ready to take lead in this, international agencies have to go together and try to define something which is a comprehensive plan to rebuild the haiti economy. we cannot go as previously in a piecemeal approach where every comes with money to try to fix one problem and another one. it probably has to take, be taken from scratch, and this could not wait. i mean, it is the poorest economy in the world and

regularly for... what has been done previously is destroyed and we really need to change the -- go phone a different league and work with haiti in a very different way. fortunately enough it's not such a big country and the total amounts which are needed are important but are not impossible to reach. and so, in the coming weeks, i will work with my friend bob zoellick from the world bank and others, the u.n.-ndp and try to see how, the tomorrow -- the business for today is to save lives as much as possible but two months from now we will be able, how we can be able to provide something which is much more comprehensive and will be a much bigger scale. >> thank you, the next question is unsigned. about oil prices. are oil prices factored in heavily in the imf forecasts?

and what are the price parameters being used? >> well, oil has of course a great importance, oil prices -- who asked the questions? just to look at you. oil prices of course have a lot of importance, and the forecasts we can make, general, we just are very close to market data, looking at the future of the market, and so the forecast we are going to release in a couple of days, the forecasts are based on something which is around $80 a barrel. which is exactly what the market says. you know, you have specialists in terms of oil price forecasts, and the specialists have proved not to be that good the last two or three years, but we are very

close as i told you to the market futures. >> thank you, another question unsigned by scientific innovation? raise your hand, who wrote the question? thank you. scientific innovation is so fundamental to economic growth, why are there so few scientists in the staff of the imf, and the world bank? >> i don't know. [laughter]. >> well, you know, the imf has not supposed to finance companies. even leading companies in terms of innovation. we are financing states. and then the states have the business to use the money best possible way. so we are not deciding, the world bank, the world bank is funding projects and we are not deciding this project is a good one and this is is a good one and we will fund this one or not

fund this one, our job is to prepare a kind of a convenient, effective environment, economic environment so that after we have done that, the different development agencies, the world bank, the regional development bank, or others are likely to invest for a long time because we prepared an economic background which makes it possible. so, our role is mainly macroeconomic. and when -- what you are seeing is mainly, not that simple but, mainly micro economic, and so that may be one of the reasons. but, it could be a good idea to at least in the research department, to have some -- i believe in mind, economists are not scientist, i understood this point. [laughter]. >> and we may have... probably may have some hard scientists giving us some better feeling of

what... what the discussions are in the scientific world and certainly will be useful and i think that is an interesting point. please follow-up. >> [inaudible]... predict nothing, okay? and so forth. they don't have -- >> okay. >> severe but true, how many people predicted what was coming on over the past, and yet they don't even have a scientific advisory board. okay? and at one point, there was a nobel laureate, leon letterman who recommended the -- a scientific advisory board and it was not well taken. >> i think the world bank is much more appropriate for the reasons i said. when you say that the economists forecasted nothing, you are

talking about oil. listen, forecasting is a difficult exercise, but let me remind you, april, spring meeting of the imf and the world bank, g-7 meeting in washington, in 2008 we had forecast, very bad. and we have been killed by everybody, saying, you are much too pessimistic, i remember meeting with one of the major -- not the u.s. -- finance ministers of g-7 country telling me -- not the french, either -- telling me, i know my economy than you guys. and, so, don't tell me this, we will do much better and so on and so forth and finally we proved when it went through and the guy came back and said fair enough, you are right. and it is because we had the bad forecast that as soon as -- in

2008 in davos i said, we needed a global stimulus of 2% and the reason we asked for the stimulus is tleesz i said before because we basically they're only ones working on the rights thing today which is linkages between real and financial economy. so i agree with you, forecasts are very often not that right and when they are wrong, we say what i said, at the beginning of these remarks, saying, the recovery goes stronger and sooner than expected which means that we plan recovery not that strong, which means we were wrong, so, i say it in a nice way but it is true. on the other hand, i do believe that the exercise i was describing, previously, the framework in the g-20 will be very helpful for our forecasts. because the advantage of a system like the imf now as wall ready existing which is we make our forecasts country by country

and try to make it consistent of one part of the world to the other one and there's a lot of alterations between the country and the imf, because at the end of the day exports from the china to the u.s. has to be equal to the imports from u.s. to china and of course when you take the basic figures it doesn't match, so we already had this kind of a process. but, not globally. on the bilateral basis, it was one thing, what you tell us is not consistent with what we know from the other one and the guy says, go to hell, i don't care. and so it was not that easy to make it consistent. now, if it works, hope it will, we have a process where everybody agrees to work together and the inconsistency will be on the table and we need really to address it so the forecast system itself may improve a lot in the coming year, hopefully. >> the next question... a greek

tragedy ahead, question mark. such to prevent european governments from bailing out greece. trichet dismissed the idea of excluding a member from the euro club. question, what is your -- should prevent us to believe greece is drifting away argentina style and what are risks of spreading out to portugal and spain, it's. >> the situation of greece is totally different from the argentinian example, for instance, it is for difficult and on the other hand, safer. it is more difficult, because greece is facing a huge deficit. accumulation of deficits, a huge debt. and is more deficit than many other countries because they don't have control of e the one valuable, which is exporting and to deal with the problem without having a possibility to move...

makes it more difficult on the fiscal side and the adjustment needed in greece, is bigger than with the same data would be needed from another country where part of the job could be done by adjusting that and it is more difficult and another point of view it is easier because it is a member of the eurozone and so, the constraints on greece are constraints on the markets, and facing the deficit but don't have a constraint of current accounts and are not likely to just collapse overnight because they won't be able to finance an external gap because there is no external gap, of course, they are inside the border and protected by the eurozone. the real question is, how are they going to do it and i say that trichet and my friends in the european commission and i can say it openly, that we want to be helpful, and if they can do the job, dealing with the problem at all it will be fine for us. we are ready at the request of

the greece government and greek government to send a mission on technical problems, or fiscal problems, tax problems, they are still there working with the government, but if the european union, especially the eurozone, is likely to deal with the problem, there is no problem. if they need us we will be ready to help also. but i would be very happy if they can fix the problem without us, and i understand how difficult it is for the country to need to call on the imf so it's... if not we'll be happy to help. >> two more questions, we have time, 1:35. >> i have. do you? >> yes, great, all right, from debbie, of kpmg, sorry for the pronunciation. do you think it is realistic or just a matter of time that the sdr replaces the u.s. dollar as

the reserve currency in the world, if the latter, what do you think is the timeline? >> well, when something has very long timeline, the question is, is it even realistic. you know, when i was -- a person has been asked for the consequences of the french resolution, the answer was, too soon to tell. so what may happen, and in a long, long period of time, i just don't know. but i don't believe that in even two, five, ten years, the sdrs can become this kind of tool. the role of the dollar is very surprising and the way it i involved during the crisis, very surprising. let's imagine that 2006, beginning of '07 before the

crisis, you had in this room a set of 50 best economists in the world. 49 being american and one coming from i don't know where. [laughter]. >> and tell them, look we'll have a crisis, or -- originated in the housing market in the u.s., with immediate spillover into the commits and big downturn and negative growth and consequences on emerging markets, no part of the world willed be immune, all this kind of thing. and tell them, okay. now what do you believe will happen to the dollar? everybody, i guess, everybody will say, oh, would be a collapse. in the confidence in the dollar and this value of the dollar. didn't happen, on the contrary. on the contrary can be challenged but it didn't happen. why? because even in bad times like this one, a lot of people, private persons, corporate and

countries believing finally the best thing to do was keep, go on with the u.s. dollar, so, will it last forever? probably not. is this the dominating role in the global economy being challenged, yes, by the euro, by the yen, can be tomorrow or the day after tomorrow, by the chinese renminbi, and so, the question is, are we going in the coming decade to a more multi-currency system? certainly, yes. if the question is do you see the role of the dollar to totally disappearing in ten years, no, i don't, no, i don't. i would like to have as they are becoming the only international currency, i can -- it is not going to happen soon. >> one last question. i guess, dorothy, from eb media. challenging one, you sold imf

gold to india recently. what will you do with the billions? >> you want part of it? well, the imf is a funny institution. our jobs is certainly to provide resources to countries having troubles in crises. that is what you see on the headlines. it happens. but, our job day-to-day is to try to provide technical assistance, policy advice, to avoid the crisis. so, in some respects we could say, when we fail... not only -- the best we work the work the less crises we have but in this institution has been building away which looked like a financial institution. we don't have payments by countries like u.n., and others to finance our ventures and we

have to live on income coming from our lending and the less crisis, the less we lend, the less we lend, the less money and the better we do our job, the less money we have which is not rewarding and it is not like we can look for new customers and cannot go to countries, telling you, you are in rather good shape but it would help me if you take some of my loan. doesn't work. so after the argentinian crisis, it had been a long period without crisis which is very good of course. maybe partly because the imf worked well and many other reasons, but that is a fact. and so, we hadn't very much money out and so we didn't have very much income. and so there had been high-profile commenting created, and they said, okay.

we should have other income for this institution, totally irrational that things that are good for imf are not bad for the world and the countries and a lot of proposals had been made and one of these, the most important was to say, okay. you have a lot of gold. without entering the details because it -- there are two kinds of gold in the imf and it is technically complicated. one part of this, 403 gold -- the gold is property of the imf and the rest is questionable, the prompt of the membership, but this is the imf's and you can use it and one way to have a more sustainable budget would be to silt, invest it and be the to have the income and then you have -- we have a steady state situation where you can live normally and by the way, it could be helpful, because we'll res rely on the income coming from lending and you can lend

cheaper. fine. then everybody says, great idea. but it won't work. it won't work because the u.s. executive director on the board of the imf explicitly is asked by the congress to oppose any sale of gold. without approval of the congress, which will never happen so forget about it. and it will not happen for many reasons. making a long list why the congress would be opposed to this including the lobby of the gold producers, who don't want to see 400 tons of gold coming into the market. so we were stuck and when i arrived at the end of the -- 2007, that was the situation. so i decided to lobby myself the treasury, rather easy, hank paulson was very helpful and then to lobby the congress to see if really it was totally

impossible to make this -- we were talking simple to obtain finally a vote from the congress, allowing us to sell the gold and after long story but i want to make it short now, it happened, with the help of this administration, very helpful, asking the congress to go forward. so, finally, great news, last september, we were likely to go forward, telling the gold. now you don't sell the gold that easily. can't just open a shop and say, you want it? so we created a first period in which we could have direct sale to several banks and this was the framework in which we sold 200 tons out of the 400 to the indian central bank and others to other and now we're in the second period where we will sell it on the market. sell on the market. what are we going to do with

this. the -- sorry, i made it long but, was for you to understand, the idea was to use it to put it into a monday and take the return of the fund for financing the fund and between the crisis has led us to commit ourselves to use a large part of it, of this income, to help low income countries and we have created -- in august, because i knew in august it would work in september, we'd have the organization to do it created in august a new lending facility for low income countries which never existed in the past which is a zero interest rate lending facility so from now on, to the end of 2011 we'll see if we will prolong it or low income countries in the fund, 76 countries, if i remember well, the last counts, are borrowing

at zero interest rate and the market price is given by the return from the gold and that this is use now and the long term use is to use it as a resource to the fund so it can be financed and not depending on the left handing to be able to have our operations. >> [inaudible]. >> please, please. >> for you to answer. first, i am... monitor the stability and economy of the member countries. i want to know if imf finds some problem in u.s. in 2007 or 2008

if imf... [inaudible] and if not what do you think imf should improve the technology and second is this: in your press conference yesterday you said that imf want to... [inaudible] and last question you mentioned about technology existing, so, in the climate change most important is manufacturing technology. i would suggest that imf should -- they said it, this technology... [inaudible] to developing countries, thank you. >> well, on the first point if i understood well, correct me if that's not the case, we have a

relationship with the u.s. as with any other countries and of course, part of our surveillance showed failure in the supervision and regulation system and also that happened in other countries and the question is now how we'll deal with a new system of surveillance and relationship and i don't understand exactly if your question was about the way we are working with the u.s. or... pardon me? >> [inaudible] imf found the problem in the u.s. or do you have other country report? and second is... >> well -- >> [inaudible]. >> two part. >> if we found something in the u.s. which in our view doesn't go well, in the country's report, the fourth article agreement which gives the right to make this kind of a --