The General Assembly,
 
      Reaffirming its resolution 50/91 of 20 December 1995, entitled "Global
financial integration:  challenges and opportunities", and Economic and Social
Council resolution 1996/43 of 26 July 1996 on strengthening collaboration
between the United Nations development system and the Bretton Woods
institutions,
 
      Expressing concern that a number of developing countries have become
more vulnerable, in the course of liberalizing their external economic and
financial regimes, to the volatile fluctuations of private capital flows in
international financial markets, and stressing the importance at the national
level in the countries concerned of a favourable climate for private financial
flows, sound macroeconomic policies and appropriate functioning of markets,
 
      Welcoming the initiative the Bretton Woods institutions have taken to
address the question of the volatility of capital flows,
 
      Recalling its resolution 50/227 of 24 May 1996, annex I, section VIII,
on the relationship between the United Nations and the international finance
and trade institutions, as well as other relevant resolutions,
 
      1.    Recognizes that technological advances have reduced the costs and
increased the speed of international financial transactions and that, as
policy liberalization has facilitated international capital flows, financial
institutions have increasingly added foreign assets to their portfolios,
paving the way towards the phenomenon of global financial integration;
 
      2.    Stresses that global financial integration presents new challenges
and opportunities for the international community and that it should
constitute a very important element of the dialogue between the United Nations
system and the Bretton Woods institutions;
 
      3.    Notes that the globalization of financial markets can generate new
risks of instability, including interest rate and exchange rate fluctuations
and volatile short-term capital flows, which require all countries to pursue
sound economic policies and to recognize the external economic impact of their
domestic policies;
 
      4.    Stresses that sound domestic macroeconomic policies of each
country in regard to promoting macroeconomic stability and growth are primary
elements for determining private capital flows, and that the coordination of
macroeconomic policies, where appropriate, and a favourable international
economic environment play an important role in reinforcing their
effectiveness;
 
      5.    Also stresses that implementation of sound domestic monetary,
fiscal and structural policies over the medium term, including ensuring sound
banking systems, is required to promote financial and exchange rate stability;
 
      6.    Further stresses that Governments and international financial
institutions have a contribution to make to reducing the risks of volatility
of short- term capital flows and to promoting stability in domestic financial
markets, within their respective competences;
 
      7.    Recognizes the progress made in improving risk management and
transparency in international financial markets, such as the International
Monetary Fund's improved surveillance capacities, standards for the provision
of economic and financial information to markets and the creation of an
emergency financing mechanism;
 
      8.    Also recognizes the progress made in establishing the new
arrangements to borrow, which would effectively double the resources currently
available to the International Monetary Fund under the General Arrangements to
Borrow and improve the Fund's ability to assist members in circumstances that
could have systemic implications;
 
      9.    Recalls that, in the context of global financial integration,
further efforts have to be made, at both the national and international
levels, to strengthen international economic cooperation;
 
      10.   Recognizes that a number of developing countries have been able to
take advantage of the globalization of finance, and notes the need for the
expansion of private capital flows and for broader access by all developing
countries to those flows, and therefore the need for the international
community to assist low-income countries, especially those in Africa, in their
efforts to create the enabling environment necessary to attract such flows;
 
      11.   Notes that a number of developing countries, among them most of
the least developed countries, especially those of Africa, have not benefited
from the globalization of finance and continue to be in great need of official
development assistance;
 
      12.   Recognizes, in this context, that the regular lending programmes
of the multilateral institutions, recent initiatives aiming at enhancing the
confidence of the financial markets, and the operational activities of the
United Nations system, inter alia, in promoting capacity-building for sound
financial management, contribute to assisting recipient countries,
particularly developing countries, in such adjustment and stabilization
efforts as are conducive to their development process;
 
      13.   Welcomes Economic and Social Council resolution 1996/43 on
strengthening collaboration between the United Nations development system and
the Bretton Woods institutions, and calls for its full implementation;
 
      14.   Notes that cooperation between the United Nations and the Bretton
Woods institutions continues to be strengthened at the level of operational
activities for development;
 
      15.   Considers that the strengthening of collaboration between the
United Nations and the Bretton Woods institutions requires an integrated
approach, encompassing a closer policy dialogue at the intergovernmental level
on relevant areas of international development policy issues, taking into
account their respective competences;
 
      16.   Stresses the need for encouragement of private flows to all
countries, in particular to developing countries, while reducing the risks of
volatility;
 
      17.   Emphasizes the need to explore ways to broaden appropriate
enhanced cooperation and, where appropriate, coordination of macroeconomic
policy among interested countries, monetary and financial authorities and
institutions, so as to enhance preventive consultation arrangements between
such institutions as a means of promoting a stable international financial
environment conducive to economic growth, particularly of developing
countries, taking into account the needs of developing countries as well as
situations that may have a significant impact upon the international financial
system;
 
      18.   Reiterates the need for broadening and strengthening the
participation of developing countries in the international economic
decision-making process;
 
      19.   Welcomes the steps taken by the International Monetary Fund, and
recognizes the need for a stronger and central role for the Fund in
surveillance of all countries, in a symmetrical manner;
 
      20.   Reaffirms the objective of promoting greater transparency and
openness, including increasing participation of developing countries in the
work of the International Monetary Fund, this objective also involving, among
other elements, the regular and timely provision of economic and financial
data by all Fund members;
 
      21.   Welcomes the decision of the Economic and Social Council that the
theme of its high-level segment in 1997 will be:  "Fostering an enabling
environment for development - financial flows, including capital flows;
investment; trade";
 
      22.   Requests the Secretary-General to report to the General Assembly,
at its fifty-second session, in cooperation with the Bretton Woods
institutions and the United Nations Conference on Trade and Development, on
the implementation of the present resolution.