•What about the global financial architecture that is being talked about?

FM: Among the things that we must agree on are common prudential and regulatory standards for all financial institutions in the world, especially those with global footprints. We must have convergence of accounting standards, we must agree to locate the resources and agree upon the channels through which this resource would be diverted to the developing countries, these could be the existing multinational institutions or we could devise an ad-hoc fund dispersing mechanism, and finally, the international institutions which constitute the global financial architecture must be reformed. And this goes beyond the IMF and World Bank. This includes the Bank for International Settlements and the Financial Stability Forum.

•Are we talking about a global regulator?

FM: See, the regulation in the present context is a function which national regulators will be loth to give up. That is why regulation must be national. If we can agree upon common prudential and regulatory standards, and then ask national regulators to apply those standards, there can be some kind of a global oversight, where the national regulators are doing their job. I don’t think regulation can be raised to a global regulator. That’s too ambitious, and perhaps not possible in today’s circumstances.

•Does it mean there will be a global oversight body?

FM: I didn’t use the word global oversight body. I just said there must be some way in which we can have global oversight through which commonly accepted regulatory and prudential standards are being applied by national regulators. But these things are to be talked over, these are ideas, these are positive things.

... contd.