§ Ms Hewitt
International investment flows can bring huge benefits to all countries. But they also entail risks, as the events of the last 18 months have shown, when investors are insufficiently informed and educated and when institutions lack credibility.220W
The G7 declaration of 30 October 1998 set out a blueprint for the reform of the international financial architecture which will make a major difference in this regard. Increased transparency and openness in the public and private sector will provide better information on which the private sector can base its risk assessment and investment decisions. Better methods of involving the private sector in crisis resolution and prevention will also sharpen private sector risk-management and reduce moral hazard.
In addition, the G7 declaration pledges to bring together the key international institutions and key national authorities involved in financial sector stability better to co-operate and to co-ordinate their activities in the management and development of policies to foster stability and reduce systemic risk in the international financial system and to exchange information more systematically on these risks.
The Government believe that the opening of capital markets in emerging economies must be carried out in a careful and well-sequenced manner if countries are to benefit from closer integration into the global economy.