If you require assistance at any point during this call, please press “*0” on your handset for an operator.  If you would like to ask a question during the Q&A portion of our call, please press “*1” on your handset to join the queue. A replay of this call will be available toll-free at 1-800-406-7325 or at 303-590-3030 until the close of Monday, May 23. Please enter conference ID 4442027 to enter the correct conference replay. In addition, a transcript of this call will be available within 24 hours. The call will now begin.

Moderator:   Thank you, Operator. Good morning, everyone, and thank you for joining us for today’s call with Brazil’s Central Bank Governor Alexandre Tombini who will provide context around and answer your questions about Brazil’s recent macroeconomic performance, inflation and capital flows.

Mr. Tombini became Governor of the Central Bank in January of this year. He has been at the Central Bank since June 2005 and previously served as Deputy Governor of Financial Systems Regulation and Organization. As a member of Brazil’s Monetary Policy Committee, he has been responsible for analyzing and presenting economic outlooks, inflation forecasts and economic scenarios for the Federal Republic of Brazil. 

Governor Tombini will be providing his remarks this morning in English and the same will be true for the Q&A portion of this call. For the benefit of all participants, we ask that you please direct your questions to Governor Tombini in English. A transcript of this call will be available within 24 hours and will be sent to all participants via email.  

Now I would like to turn the call over to Governor Tombini. Sir?

Governor Tombini: Good morning everyone. I’m very pleased to be here on this very impressive conference call.  I would like to focus on recent economic developments and the outlook for 2011 for Brazil. But before that, I would like to take a step back and just speak a few words on how Brazil has gotten where we are today, and also some of the longer-term issues for Brazil and then jump into the current developments for the outlook for 2011.

First, to understand where we are today I think we should highlight three areas: 

The first one is that we have now in Brazil a very well-tested macroeconomic policy framework. It has been in place for more than a decade and has been very instrumental for Brazil. 

Governor Tombini: This macro framework combines an inflation targeting framework for monetary policy together with a floating exchange rate regime, a fiscal policy that has been driven in the last decade toward fiscal consolidation in terms of putting our debt-to-GDP ratio in a path of consistent decline over the years. 

And in addition to that, we have accumulated an international reserves position that, since late 2006/early 2007, has allowed the public sector to enjoy a long position in foreign exchange. So we have done away with a vicious circle that we used to have when we had an international shock because you would depreciate and these were really concerns about that sustainability. This time around, we have the opposite in Brazil which has allowed us in the last crisis in 2008/2009 to implement countercyclical macro policies, among other things.  Because the public sector had in the first moment of the crisis when the real depreciated an improvement in its fiscal position, this allowed us to implement this countercyclical fiscal policy which has been very successful.  

The other area that I would like to highlight regarding Brazilian recent economic developments has to do with this focus of the Brazilian administration to close the social gap.  

We have designed and implemented targeted social policies to reduce the social gap prevailing in Brazil and this has produced very important social, but also economic results for Brazil. For instance, we have been able to raise over 20 million people from below the poverty line. The new Brazilian middle class has gathered more than 35 million people in the last decade or so, so this has prepared Brazil for the much more robust domestic market we have today, which also has been very instrumental during the critical days of the 2008 financial crisis.

The third and last area that I would like to highlight – to understand why Brazil is in the position it is today – has to do with us having strengthened our financial regulation framework, the prudential regulation as well, as we have over the years put in place a very intense financial supervision area at the Central Bank and in other areas in other regulated businesses, but particularly here in the Central Bank. So this time around in 2008 the financial system in Brazil was the mitigator of major global financial shock that we had to experience and to deal with in the last three years.

So I think those three areas are important: a well-kept policy framework, policies started to close the social gap, and strong and intense financial regulation supervision. 

Having said that, going forward I think we have a very promising outlook for Brazil. I’m talking about over the medium-term, so we have to rebuild infrastructure. We have a number of international events including the FIFA World Cup in 2014 and the Olympic Games in 2016. We have to develop our natural resource reserves.  The pre-salt oil reserves will need to be continued to be developed in the coming years so the results are the prospect for moving, progressing, and closing this social gap.  There is an eradication of poverty program in place so in the coming years we will continue to invest in this area to strengthen our domestic economy this way.

Governor Tombini: Until 2025, Brazil will still enjoy a “demographic bonus”, meaning that there will be more people of working age than otherwise, so this opens a host of opportunities in terms of increasing the productivity of the economy and rising savings levels when you have this kind of demographic bonus.  During this period, we have the opportunity to strengthen those areas.

And along this, we have before us the challenge to develop additional and alternative sources of long-term funding, the private sector. We need to develop the private fixed income market in Brazil going forward.

Well, so much for what we have done so far and this future ahead of us. 

Right now we have some challenges in the short-run and the first one is to bring inflation back to the center of the inflation target of 4.5%. 

Inflation in 2010, just to review a bit some of the major macro developments, we had in 2010 inflation at consumer price at 5.9% closing the year. The economy grew by 7.5% with demand growing double digits in 2010, more than 2.5 million jobs were created in 2010. This has produced a number of consequences, including the fact that we are now dealing with some of the inflation pressures. Brazil has been very active on this front, fighting the motives of inflation. The motives of inflation have a number of sources. One is demand, which we are dealing with but we also have, in the second half of 2010 and the first quarter of this year, some important developments as far as commodity prices are concerned.   Food pricing was also part of the story of why inflation has risen in Brazil, like in other parts of the world. Also energy prices lately have been another source of inflationary pressures.

For 2011, a survey of market expectations is now expecting inflation to close the year at 6.3% and GDP to the order of 4.0% for 2011. Inflation developments are improving. We are about to have a period ahead of us that will bring current inflation at low levels comparable with the 4.5% target. But it’s all about inflation because of what has happened in the initial four months of the year and also due to some fiscal effects from last year will continue to increase a bit and should peak around August this year. At the same time, monthly inflation will, as I mentioned, peak at the levels comparable with the 4.5% inflation target.

The Central Bank of Brazil has tightened policies since the beginning of this Administration in January. We have tightened the SELIC rate, the basic policy rate by 125 points. Since April 2010, since after the crisis, we have risen the policy rate by 325 basis points so we have been very active in tightening our monetary policy instruments to achieve and to contain, to moderate the pace of demand growth and therefore to bring inflation back to target.  

I think we have work ahead of us.  The COPOM, the Monetary Policy Committee, has communicated to the Brazilian society to market participants that we have work ahead of us in order to consistently anchor and bring inflation to the 4.5% target and as you know our system is on the calendar year basis system and we have already communicated that the center of the target will be met in 2012.  

Governor Tombii: In addition to directly addressing inflationary pressures with monetary policy, we have also in this latest period, in the last four months; we have had a very significant inflow of capital in Brazil. Of course we do have a good case here in Brazil to be an attractive destination for resources. We have been a very open economy to FDI, but over and above that have been flows which relate to the monetary policy and financial conditions that prevail in mature economies—the US, Europe and other areas—so this has generated an amount of liquidity and part of it has come to Brazil, raising other types of challenges for us.

One of them is that this global liquidity has led to domestic liquidity, presenting an important “tailwind” as far as domestic credit is concerned, and that caused expansion.  So we are addressing this issue, trying to moderate credit to make sure that credit grows on account basis going forward. We have applied a number of macro prudential policies to contain and to secure financial stability going forward.  

And we also have acted on the flows, the inflows themselves, to make sure that there aren’t excessive flows that could at some point jeopardize financial stability in the future, because part of the story of us attracting capital into Brazil has to do with a situation which is extraordinary. It’s extraordinary to have such very low levels of interest rate elsewhere, the negative real rates.  This situation at one point will begin to normalize, and when the normalization comes, the exit strategy of mature economies as far as monetary policies are concerned will come, and this will have implications on other parts of the world including Brazil.  We have to be prepared so that when this reversal comes, it doesn’t raise any issues of economic and financial stability. So in a way, we are preparing for the exit strategy somewhere else.

In this regard, I just want to mention we announced the creation yesterday of a Financial Stability Committee in the Central Bank. What we want to do with that is basically to focus the attention to better integrate our technical staff to reflect and to focus attention on financial stability issues, on the one hand, and also to have the high administration of the Central Bank involved with the issues in a more systematic way.  To have in one day like we have, for instance to focus on monetary policy issues, we have one specific day where all the attention is focused on this particular issue. I think we have a lot to gain in terms of improving our capacity to secure financial stability going forward. It is a basic change. 

So just to wrap up, as I mentioned before, the recent results of inflation are very promising. 

We will see monthly inflation now coming down. This is the market expectations as well, that we will have a number of months now with inflation very consistent with our inflation target for Brazil. But, having said that, consistently anchoring inflation going forward at the center of the target will require work and the Committee has already communicated that we will need a sufficiently long process to make sure that we stabilize inflation around our inflation target of 4.5%.

So those are my initial remarks and I’ll be happy to take questions as we go forward. Thank you very much.

Moderator: Great. Thank you, Governor Tombini. We will now open the call for Q&A.  Operator?

Operator: Thank you. Our first question is from the line of Joe Leahy with Financial Times. 

Joe Leahy: Yes, Governor—President Tombini, the IMF has spoken recently of these strong tailwinds that you mentioned just before, driving Latin American economies such as commodity prices and liquidity from abroad. They’ve also said that Brazil needs to put on the brakes a bit harder or it will risk overheating. So my question is, should you be doing more to slow down the economy and are we seeing elements of a bubble emerging in the Brazilian economy?

Governor Tombini: Thanks, Joe, for your questions. I think what the IMF said was in our annual inflation target seminar last week, was that we have to take care of those potential tailwinds.  And a country like Brazil, which is doing precisely that, is in the right direction as far as containing financial risk going forward. Also, moderating domestic credit growth should be a translation of this global liquidity, as well. Moderating this is very helpful and should improve the traction of our monetary policy instruments as we go forward. 

I think the message from the IMF that I heard was more on the supporting side, saying that a country like Brazil is being very active in addressing inflation pressures and potential financial risks that emerge from this global situation, as you mentioned, high commodity price which can be at some point adjusted and then the extraordinary levels of liquidities that we are seeing today.

With respect to credit development in Brazil, I think credit is being evolved on a very sound basis. We have communicated to the market and we have taken up a number of measures to make sure that credit moderators were moving to slowing part of the economic cycle in Brazil.  This is healthy and we will continue to pursue these kinds of developments here in Brazil. 

We’re seeing some talk about, for instance real estate financing, and here you know quite well that we are very conservative.  Although real estate finance is increasing in Brazil, it comes from a very low basis. We still have a pent-up demand in Brazil for housing units that ranges from anything from 5 million housing units to 7 million housing units. We have, as far as real estate financing is concerned, loan-to-value, on an average of 60% loan-to-value so it’s a low, conservative average.  And we have a framework which penalizes larger coverage of financing with respect to the value of the property being financed. So, we do have a stable source of funding for this type of credit which is the same as accounts, which have shown a very remarkable stability. 

We at the Central Bank are always working 24 hours a day because we have banking supervision under our umbrella to make sure that problems, if they arise, are addressed promptly and that’s a very secure form. So these are my basic views for answering your question.

Operator: Our next question is from the line of Andre Soliani with Bloomberg News. 

Andre Soliani: Good morning, President. Yesterday you had economic activity index that came and it has been controversial on whether it shows economy slowing or accelerating. What is the Central Bank’s view on that? Is the economy slowing down to a level consistent with inflation targets and will the economy be growing at below potential in the coming quarters?

Governor Tombini: Thanks for your question. I think the figure that we released yesterday, our monthly economic activity indicator has shown that in March the Brazilian economy expanded by 0.5% so this is comparable with a growth of 1.4% or so for the quarter. Comparing this first quarter against the first quarter of 2010, growth has been to the order of 4.38 or 4.4% ,so we are in a moderation mode. The first quarter was on the high side but comparable to our assessment, comparable to this increase of 4.0% for 2011. 

And as I mentioned before, the 125 points of tightening and some of the macro prudential policy, all of these policy initiatives operate with lags so most of what we are doing now, we will begin to see towards the end of the second quarter and more intensely the effect of these measures on the economy and on inflation in the second half of the year. So I think everything is in line with our thoughts as far as having a deceleration of demand in Brazil for us to be able to bring inflation to 4.5% in 2012.

Operator: Our next question is from the line of Luciana Lopez with Reuters. 

Luciana Lopez: Hi. I wanted to ask if Mr. Tombini sees the role of macro prudential measures, that is to say measures other than interest rate hikes, differently now than perhaps earlier this year? Has the role of macro prudential measures evolved at all?

Governor Tombini: Well thanks for this question and we have always communicated here at the Central Bank that the macro prudential policy’s main objective is to contain, or to secure financial stability, which is one of our missions here in the Central Bank. We have to do a role not only securing monetary stability but also financial stability so the Central Bank has been clear to say that macro prudentials are geared toward securing and are conducive to the retained financial stability.  

Having said that, what we also said since the beginning, and we haven’t changed that, is that since macro prudential began to operate—some of them operate in the credit channel and the credit channel in Brazil has become more preeminent in the last decade or so—credit used to be 25.0% of GDP in 2002. Now it’s around 50% of GDP so we have a much deeper and developed credit market in Brazil and if you have measures that aim to contain and to moderate the pace of growth in credit, you affect the credit channel and this has been a more important channel position for monetary policy. Therefore, the macro prudential policies which are aimed at securing financial stability – and we haven’t changed our views on that – will have an implication for aggregated development for monetary policy. We have to take that into account when we set our policy rates, for instance. Likewise we take into account the fiscal policy expense of all this development when we set, for instance, interest rates here at the Central Bank.

So we haven’t changed. I mean, we have continued with our conventional policy tightening since the beginning of this Administration in January 2011.  Thank you. 

Operator: Our next question is from the line of Matthew Cowley with Dow Jones. 

Matthew Cowley: Good morning. I wanted to follow up on the question of credit growth. The Brazilian banks don’t seem to be that affected by the macro prudential measures and they’re all forecasting credit portfolio growth of 20.0% this year, which is well above the 10.0-15.0% you’ve said is healthy. Does that mean that you’re going to have to take more steps to reign in growth, or are the banks overestimating credit growth?

Governor Tombini: Well thanks for your question. I think there is a bit of noise in terms of the effect of macro prudential policy on credit growth. We have focused our attention and the macro prudential initiatives on consumer financing.  And as far as consumer financing is concerned, what we have seen is that there has been great moderation since the adoption of some of the measures. Some of them were adopted in December 2010. I mean the doubling of the capital requirement for consumer credit when we’re talking about extended maturities, so we have doubled the capital requirement.  There has been also the doubling of the financial tax on consumer financing credit. 

Those have produced important results.  When I compare the new loans adjusted for seasonality, for vehicle financing, for personal credit, I see a significant contraction in the new disbursement of credit.  Of course the stocks of credit increased because we are raising rates; rates have been raised considerably as a result of monetary policy tightening and from credit measures themselves, but when we look at concessions or new credit being extended, you see at the margin contract when you compare the figures prevailing in November last year before some of these measures and for instance March, April. So we have seen a contraction. We have seen a reduction in maturities of consumer finance and loans, car financing, and we also have seen a significant increase in lending rates. 

So I think the measures are working. We are seeing some credit moderation. Having said that, there is still a large amount of liquidity in the market. There is still some areas of credit that are growing fast and some that should grow fast because of the low base effect such as real estate.  Going forward we understand that this will be increasing this year above this average.  But we still expect that credit will grow below 15.0% for the year 2011 and our view, and I think it’s a growing perception that the macro prudentials as far as their objectives to moderate credit growth, to make credit more secure going forward, are working well. Thank you very much. Next question, please.

Operator: Our next question is from the line of Nadia Pontes with Deutsche Welle.

Nadia Pontes: Thank you. Good morning. I actually have two questions but I’d like to start with this thing with IMF. You served as the Brazilian representative office of the IMF and I would like to hear from you, Mr. Tombini, whether Brazil would be prepared to take this position now that it has been opened today.

My second question is, now that Brazil has also this committee for stability and we have seen the same committee working here in European Union, I would like you to differ the work, the job of those two committees.

Governor Tombini: Thank you. Brazil has held for a long time the position that the top job at the multilaterals such as the IMF and the World Bank should be subject to a broad base selection process which takes into account a merit-based approach towards the selection of the leadership, independently of nationality or geography. So we believe this principal should be upheld going forward. I think it is an important message right now going.  I thing, going forward, it has to be broad-based, merit-based, and a sufficiently transparent process for choosing the leadership of the multilateral institution.

With respect to our committee here: I understand the committee that you mentioned is a broader one in the sense that; well, first of all, it aggregates many jurisdictions within the European Union, but also many different regulators. In our case, we already have a committee which integrates the Central Bank with other regulators such as market regulators and insurance regulators and others. On top of that, now what we have is a more systematic way of dealing with and assessing financial stability within the Central Bank. So we have the benefit since the creation of the Brazilian Central Bank to have banking supervision, banking regulation and a classical Central Bank under the same rules. This was very instrumental during the 2008 crisis. But now what we are doing is to make it a more systematic integration at the staff level, on one hand, and also have the high administration of the Central Bank. They voted to do financial stabilities for one entire day and so there is a lot of preparation put forward for this kind of meeting. So I think now a case here is more internal step that we have taken here at the Central Bank.

Operator: Our next question is from the line of Daniel Horch with Market News International.

Daniel Horch: Hi, Governor Tombini. I wanted to know if you are satisfied with the effect of measures taken to slow or limit foreign capital inflows which still seems to be quite strong or if more measures could be taken?

Governor Tombini: Thanks, Daniel. Our view, as I mentioned from the dimension of preparing the country for the exit strategy in a few quarters, so we have taken steps.  What we have seen since last year, there was a re-composition in capital inflows more towards FDI in the last 16 short-term flows. We have seen first, also a composition towards short-term borrowing direct from Brazilian corporates and banks. We have addressed that with a 6.0% IOF tax on borrowing for up to two years or 720 days. So now what we see is that the flows are moderate.

The latest figures show that part of the wires in capital inflows has to do—or in the balance of inflows – has to do also with the balance of trade. So it’s the floating exchange rate regime working its way, meaning that you had the weakening of the real in a couple of weeks and then there is an effect for exporters bringing their proceedings and this, to a large extent, the recent inflow into the Brazilian economy have to do with the floating regime working as we would expect. 

So I think we are happy in terms of moderating, in terms of containing a bit this tailwind as I mentioned and someone else mentioned today, this tailwind which translates global liquidity into domestic liquidity. So I think we are progressing in this area and going forward.

Operator: Our next question is from the line of Joshua Goodman with Bloomberg News. 

Joshua Goodman: Yes. I wanted to follow up on the question about the IMF presidency now that Dominique Strauss-Kahn has resigned. Countries in Europe including Germany today are rallying behind the choice of French Finance Minister Lagarde as his successor. I wanted to get your reaction to that and whether you think emerging market nations, including Brazil, will float their own candidate coming from the developing world?

Governor Tombini: Again, thanks for the question. I think here most important for us now is to uphold the principal that the top job has to be selected in a very transparent, broad-based selection process and be focused in being the main criteria to be merit-based criteria in the selection of the new managing director.

I personally have nothing against geography, but the principal I think should be upheld this time around. This is a position that we have supported for many years and I think it’s time to open up the process and these are our views. I think what’s more important right now is to have that principal retained, rather than talk about specific names right now.

Operator: Our next question is from the line Thierry Ogier with Emerging Markets and Les Echoes.

Thierry Ogier: Good morning. Going back to the issues of credit, recently we heard an official from IPEA saying that financial institutions were not helping the Central Bank’s efforts to moderate credit. He said it was actually some sabotaging or jeopardizing efforts. I would like to know what is your opinion on that?

Governor Tombini: I don’t agree with that. This is a personal opinion, I think. We do have some areas of the credit segment that will grow above what will be an overall headline figure for credit growth this year.

What we have seen so far is that the measures taken and the cyclical position of the Brazilian economy, meaning the Brazilian economy now is slowing down, so in this part of the cycle it’s a result that the delinquency ratios begin to increase. So at this stage, credit should and would moderate and we are seeing some of the figures that are pointing more consistently in the direction of—for instance, as far as personal credit is concerned, that there has been moderation at the margin in terms new concessions. In car financing, personal credit, household credit in general it has been contained. We have seen smaller disbursements by BNDES for instance, there has been moderation. To compare the first quarter 2010 with the first quarter 2011, you see some moderation also in the disbursement of credit by BNDES to the order of around 2.2% with us. So we are seeing many instances that credit is being moderating at the margin.

Operator: Our next question is from the line of Jorge Porter with Business News Americas. 

Jorge Porter: Yes, good morning, Mr. Tombini. I have one question regarding the creation of the Financial Stability Committee. Can you please elaborate on what was the reason behind the creation of your committee and what are the expectations of it going forward?

Governor Tombini: All right, yes. This wasn’t a new idea, meaning many central banks are better organizing their areas of financial stability. Our main goal here is to make sure that we integrate the areas that do the thinking here in the Central Bank.

In a committee like that and having set dates to have bimonthly meetings of this committee, you have the opportunity to integrate not only the supervision area with the regulatory area but also the economic and the market monetary area in the Central Bank. So you have the economic information in terms of the trends the Brazilian economy is following, the various sectors of the economy, how they are evolving, integrating this with our market intelligence information from the various markets we have—derivative markets, foreign exchange, mutual funds, et cetera—all the market intelligence information integrating with the economic information and then with the regulatory and the supervision areas. 

So it’s an opportunity to improve our management of this important issue, which is financial stability and how we secure that. This is the technical level and at the high administration of the Central Bank, then you also have one day the discussion, the preparations to the meeting which will focus the attention of the leadership of the Central Bank and this very important issue so it will be more involved in designing the agenda of issues and also we have the opportunity to reflect on a more profound and a more systematic way about this quite important issue of financial stability.

Operator: Our next question is from the line of Alfredo Coutino with Moody’s. 

Alfredo Coutino: Thank you very much, Governor Tombini. Going back to the inflation problem: if we apply the macroeconomic definition of economic overheating when an economy usually grows above potential capacity mainly because of a strong domestic demand, consequently imposing pressures on inflation and imports. If we apply this definition and we compute the excess demand for the Brazilian economy, so we see that there is an excess demand but it’s very low, very small compared with what happened in previous year.

So my question here is do you really believe and the Central Bank believe that the inflation rebound in Brazil is mainly caused by demand pressures and not by say imported components from commodity prices? Thank you.

Governor Tombini: Thank you. I think we have multiple sources, as I mentioned. Commodity prices, energy prices being an important one, but also demand has been an issue and we have made an effort to moderate demand growth to align it with potential output growth going forward and I think we are in a very consistent path toward achieving this goal and securing inflation of 4.5% in 2012.  

But I think, yes, we do have some signs that demand also, it’s an important issue. If you see, for instance, service inflation with a significant component of demand, it would be circumstantial, would be conjunctural.  Plus we do have the structured story here in Brazil. The type of economic infusion that we had in Brazil with this enlargement of the middle class is having a structural impact on services. But then also a conjunctural impact that has to do with the strength of our labor market, with credit growth, with income growth and in the past 

Governor Tombini: which gives credence to the view that part of this inflation pressure in Brazil has to do with demand, and that’s why we are acting with this aggressive policy to bring, to re-establish inflation convergence at 4.5%.

Moderator: Our next question is from the line of Joe Leahy with Financial Times. 

Joe Leahy: Yes, President Tombini, there’s been a lot of talk recently about the internationalization of China’s currency, the renminbi. I want to ask you how is that affecting Brazil? Is it possible for exporters to use the currency presently and we seeing any pressure on the Central Bank or on the government to facilitate this process?

Governor Tombini: I think the internationalization of currencies such as the renminbi, the real in the future, is inexorable. I mean given the relative weight of these economies, the relative weight of their financial sectors, we’ll see increasingly in the future a wider acceptance of currencies as the Brazil real, the renminbi and others.

I think the use in bilateral trade is possible, it’s limited but it’s possible, and we don’t see at this point any of the challenges you mentioned. I think with respect to China, we have had a very complementary relationship in terms of as far as foreign trade and investment is concerned. To touch upon your question, I think internationalization of currencies such as the Brazilian real and the Chinese renminbi is an inexorable move going forward in the future.

Moderator: Our next question is from the line of Nadia Pontes with Deutsche Welle. 

Nadia Pontes: In the 1980s and 1990s, we saw in Brazil how the IMF played important role in the country and all the problems we had at that time in Brazil and now the same IMF is helping the EU to get rid of this crisis here and it’s so important for the whole group. And now Brazil can even offer a president for IMF. How do you analyze this changing position? How do you analyze this new scenario?

Governor Tombini: Thank you. I think there have been many, many changes in the world recently and the relative size of economies like Brazil have increased a lot in the last five years or so. So I think with respect to the IMF, I believe it is a very important multilateral institution that has this role of helping countries in difficulty in their balance of payment and their domestic economies and their problems with sovereign debt, so I think the IMF should and would play a very constructive role in helping the EU to solve the problems that have emerged today. So I think the IMF is playing its role and should continue to play in Europe and countries should not have the stigma to go to the IMF for help. I think the IMF is very well positioned, has the expertise to help countries, including in EU.

                        Thank you very much.  

Moderator: Thank you very much. And that concludes the Q&A portion of our call. Once again, thank you for participating in this event.

Moderator: Thank you very much. And that concludes the Q&A portion of our call. Once again, thank you for participating in this event.

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