IMF Seeks Views on Surveillance, Lending and International Monetary System (IMS) Reform
At its October 2009 Istanbul meeting, the International Monetary and Financial Committee (IMFC)—the IMF’s policy advisory committee called on the Fund to review “its mandate to cover the full range of macroeconomic and financial sector policies that bear on global stability, and report back by the next Annual Meetings”.
The online consultation on IMF Surveillance, Lending and International Monetary System (IMS) Reform concluded on May 20, 2010. The complete list of written comments are available here.
The Executive Board met on February 22, 2010 for an initial discussion of how to strengthen the Fund’s mandate to better equip the institution to safeguard global stability. Reconsideration of the institution’s mandate is part of a broader reform effort underway at the Fund, including on governance, which is key to its long-term legitimacy and effectiveness. In the coming months, staff will prepare Board papers focusing individually on the Fund’s role in the key areas of its mandate—surveillance, financing, and the stability of the international monetary system—drawing on its own analysis and also extensive outreach with country authorities, academics, and civil society. This public consultation effort is a part of the stated outreach.
Below are the key questions that the papers will strive to address:
Should Fund surveillance be emphasizing more the systemic –as opposed to domestic—effects of policies of major advanced and emerging market countries? What would be the best way to do so? What kind of financial sector surveillance is needed to get to the root of risks emerging from the financial sector? Should the Fund rethink its focus on individual countries as the main unit of analysis and devolve more attention to themes, sectors, networks interconnected countries, and large complex financial institutions? In what other ways can the Fund improve its surveillance activities?
On the Future Financing Role of the Fund:
How can Fund’s financing instruments be enhanced to provide credible alternatives to reserve accumulation for precautionary reasons? How might the Fund enhance its existing facilities to better respond to country-level and systemic crisis?
On the International Monetary System(IMS):
The current international monetary system has demonstrated its resilience, but episodically concerns have arisen about the stability of the main reserve assets, as well as access of countries to international capital markets. These problems have been manifested in recent years by the high and growing demand for reserve assets, concentrated on a narrow supply, and an asymmetric adjustment across countries with surplus economies facing fewer pressures to adjust than deficit countries that do not issue reserve assets. What reforms could be considered to improve the system? Could an increased role of the SDR over the longer term help, and should consideration be given to a new globally-issued reserve asset?
IMF Consultation Process
The online consultation on IMF Surveillance, Lending and International Monetary System (IMS) Reform concluded on May 20, 2010. We requested that comments be submitted by May 15, 2010, to allow their consideration for the review. Contributions were sent through IMFConsultation@imf.org or by leaving a comment for each item by clicking on the links above. The complete list of written comments are available here.
As background, the paper The Fund’s Mandate—An Overview outlines the main issues that the Fund is looking at as part of the review of its mandate. Additional papers will be posted in the coming months, also as background for the consultation. The consultations will feed into the final report being prepared for the Annual Meetings