Source: The Wall Street Journal Asia                     Date: 20 July, 2010

The International Monetary Fund should come up with a detailed and realistic plan for tackling the volatility that can arise from rapid international capital flows, thereby ensuring global financial stability, South Korea's Finance Minister has said. "I believe the IMF has an important contribution to make, by proposing and enacting concrete and realistic measures to strengthen financial safety nets around the globe," measures that the Group of 20 leading nations are aiming to finalize at their summit in Seoul in November, Minister of Strategy and Finance Yoon Jeung-hyun said in a prepared welcoming speech for a three-day IMF-South Korea Asia 21 Conference.

The conference, co-hosted by South Korea and the IMF, is designed to repair the latter's image in a country where the assistance it gave during the Asian financial crisis remains controversial at best. Mr. Yoon called for a change in the Washington-based body to reflect the growing voice of the increasingly important Asian economy by speeding up its efforts to overhaul quotas.

IMF Managing Director Dominique Strauss-Kahn said Monday that Asian policy makers need to be prepared for further possible shocks given downside risks to the global economy including the recent turmoil in Europe. With Europe and U.S. expected to witness a potentially extended period of lower growth rates, Asia needs to increase its domestic investment and consumption as a long-term policy issue, he said.

"As Asia's economic weight in the world continues to rise, its stake in the economic performance of other countries is rising, too," Mr. Strauss-Kahn said. "In my view, the macroeconomic, financial and corporate sector reforms put in place over the last decade have played an important role in the region's resilience. So, despite being hit hard initially, Asia was able to bounce back quickly from the global financial crisis."