FROM THE OFFICE OF PUBLIC AFFAIRS

It was a pleasure to host my G-7 colleagues here in Washington. I enjoyed our candid and productive discussions.

We all agreed that growth in all our economies is crucial to global prosperity. I emphasized to my colleagues my belief that in the US, the foundations for economic expansion are sound. In fact, the prospects for improving the world standard of living are better now than at any time in our history.

We had a good discussion of the IMF's work on crisis prevention and crisis resolution. I stressed that strong and effective crisis prevention is a top priority. Both the IMF and individual countries should play key roles in this effort. Learning from previous experience, and with a view to forestalling crises, we resolved to monitor economic and financial developments more closely and to encourage early action to correct policies. The IMF needs to sharpen its focus on financial markets and their implications for the sustainability of capital flows.

We invited President Wolfensohn of the World Bank to join us in a candid discussion of reform of the multilateral development banks (MDBs). MDBs must continue to play a crucial role in supporting economic development and should ensure that their operations to reduce poverty in developing countries concentrate on enhancing productivity growth and raising income per capita. Towards these ends, they should adopt a more selective approach that sharpens the focus and improves the effectiveness of their operations.