WASHINGTON Oct 9: The policy making interim committee Sunday endorsed the creation by the International Monetary Fund (IMF) of a new emergency financing mechanism (EFM) to help it respond promptly and pru dently" to serious financial crises.

The committee also endorsed detailed proposals for a tightening of surveillance of members economic and financial policies to provide early warning concerning trends that could potentially develop into a crisis.

The 24-nation ministerial

panel stressed the crucial need to ensure that the IMF would have adequate resources at all times.

It asked the fund's executive directors to report back by next April on their on-going review of an increase in the IMF's capital, or quotas.

It also endorsed proposals by the group of 10 (G10) countries for new parallel financing arrangements complementary to the GlO's General Arrangements to Borrow (GAB).

It said the alm would be a doubling "of the resources currently available under the

GAB" through contributions from members of the GIO and from other countries with the capacity to support the international financial system."

The panel stressed that expanded borrowing should not be a substitute for a quota increase.

AP reports says: After a rough spring, the world's top finance officials are feeling pretty good about the current state of the global economy.

Because of the favourable outlook, they have been content at this year's annual meetings of the International Monetary Fund and World Bank to give each other pats on the back and do only a little minor fine tuning.

They did adopt a package of reforms directed at the world's worst financial crisis in a decade, last winter's near default by Mexico.

They also pledged to continue cooperating closely to try to reign In unruly currencies and directed the IMF and the World Bank to prepare as soon as possible an assessment of what economic resources will be needed to rebuild war-torn Bosnia.

The meetings were scheduled to continue Monday with officials debating proposals aimed at addressing the debt problems of the world's poorest countries.