THE G7 agreement reflects the determination of the G7 to modernise the financial system and to put in place new rules and procedures that will promote stability and growth. These are the key points of agreement:

An acceptance that the balance of risks in the world economy has shifted from high inflation to concerns about low growth and a commitment to create or sustain conditions for strong, domestic demand-led growth;

New arrangements for finance will be implemented to deal with contagion, including an enhanced IMF financing mechanism supported by private sector involvement and by bilateral finance as appropriate;

A commitment has been made to develop and implement international principles and codes of best practice on fiscal policy, financial and monetary policy, corporate governance and accounting, and to work to ensure that private sector institutions comply with new standards of disclosure;

All countries will be encouraged to meet these standards. The IMF will monitor and report on countries' compliance;

A new process has been agreed for surveillance of supervisory regimes; international institutions and national regulators will co-operate, co-ordinate, and exchange information;

A commitment has been made to develop better procedures for crisis management, including more orderly workouts of debt, effective insolvency and debtor-creditor regimes, lending into arrears by the IMF and innovative financing techniques by the private sector;

There is now a presumption in favour of openness at the IMF and World Bank and an agreement to establish a formal mechanism for evaluation of IMF policies and operations;

There has been an undertaking to conduct further work on strengthening prudential regulation, maintaining sustainable exchange rate regimes, developing new structures for co-ordinating official finance and strengthening the interim committee and the development committee at the IMF and World Bank.