The International Monetary Fund (IMF) and the Financial Stability Forum (FSF) are likely to co-operate and to provide an early-warning system in an effort to prevent future financial crises.

The FSF is an international group that includes central banks, the IMF and other financial and regulatory bodies that was tasked last year with drawing up an initial response to the unfolding crisis sparked by the collapse of the US subprime mortgage market.

``The financial crisis has underscored the importance of international coordination both in responding to the crisis and in developing and implementing policies for a sounder financial system``, the IMF and the FSF said in a joint letter to the Group of 20 (G-20) industrialized and emerging countries.

The FSF includes the heads of finance, central banks and financial regulatory authorities of 12 major economies, as well as international institutions including the IMF, the World Bank and the European Central Bank, and international standards setting bodies such as the Basel Committee on Banking Supervision.

The 185-nation IMF, charged with promoting financial stability, evaluates members` economies annually and issues detailed reports on the financial systems.