ABSTRACT
This chapter provides an overview of the main tasks that the G8 leaders might face at future summits. It offers some brief guidelines for dealing with the current agenda of international finance. Financial innovations create significant leverage in the international financial system, in particular when business is done beyond regulatory jurisdictions. Opening markets and liberalising trade in the industrialised countries are essential aspects in an internationally co-ordinated approach to the stability of the financial system. In the context of the principles of good governance, transparency in the banking sector is indispensable. Governments that allow public debt to increase beyond levels of sustainability may be tempted to put pressure on the central bank to accelerate monetary growth so that inflation will eventually reduce the real burden of that debt. The institutional measure to discipline fiscal and wage policy is to grant the central bank independence from governmental intervention and to set rules to enforce a stability-oriented policy.
