Equities surge shows cooperation works: Boutros-Ghali

By Lesley Wroughton

WASHINGTON (Reuters) - A rally in world stockmarkets on Monday showed that weekend collaboration among the world's economies to limit the impact of the financial crisis succeeded, Egypt's Finance Minister and head of the IMF's policy-steering committee said on Monday.

Stocks surged and the Dow Jones Industrial Average had its biggest point gain ever on Monday, rising more than 900 points, after weekend measures by European countries and the Group of Seven major economies to rescue a distressed financial system.

In a communique on Saturday, the IMF's policy-steering committee, representing the fund's 185 member countries, threw their support behind the G7 plan in a broader effort to bolster market confidence.

"Monday morning markets was seen as the test of the effect of our actions," Egypt's Finance Minister Youssef Boutros-Ghali, who chairs the policy-steering International Monetary and Financial Committee (IMFC).

"I had no doubt that markets would move up, but the only thing that worried me is that the proceedings of the IMFC would not have enough exposure so people would know what we did," he said in an interview.

The urgency of dealing with the crisis distracted from Boutros-Ghali's recent appointment as IMFC chair and the first time that an emerging country has headed the committee after years of European dominance.

Boutros-Ghali said there was no discussion during the IMFC meeting on Saturday about any particular country's rescue plan, but there was unanimity that the G7 package had to be supported to calm panic in global markets.

"We got a feeling in the room that we should stick by each other, support each other," Boutros-Ghali said of the meeting of finance leaders. "It's a global problem and we needed a global solution."

He said particular care was taken in the IMFC's communique not to confuse the message that all countries were behind the G7 plan.

"We took care that there would be no room for misinterpretation, so that there would not even be the possibility of misinterpretation," he added.

Boutros-Ghali said rescue package by countries need not be identical because not all problems are the same, but it was critical that governments cooperate more.

He said while cooperation among countries was improved during the three-day IMF meetings, it needed refining.

"The process may not be quite in place, it needs to be more tightly organized," Boutros-Ghali added.

IMF WATCHDOG ROLE

He said it was also important that the IMF stepped up to its role as watchdog of the global financial system and should do a better job of overseeing country's economies.