B. Publication Policy for Repurchase Expectations

4. Some Executive Directors have asked for additional information regarding the proposed policy on publication of requests of extensions of time-based repurchase expectations. The following paragraphs lay out in more detail the proposed procedures when members meet expectations, when members request extensions, and when members miss repurchase expectations. It should be noted that these procedures are expected to be first used in early 2003, when the first repurchase expectations in the credit tranches would fall due, and may need to be adapted in light of possible future changes to the Fund's publication policy.

Financial information provided on the Fund's external website

5. The background to the proposed decisions on publication in these cases is that complete information about the Fund's financial relations with individual members is already provided on the Fund's external website. The information currently provided includes the history of purchases made, the member's outstanding credit, repurchase obligations falling due, and repurchases completed. The schedule of repurchase expectations will also be posted on the website. The information is updated monthly. From this information, it will be possible for knowledgeable observers to derive whether a member has met repurchase expectations or not, and whether a member has been granted an extension or not.

6. When a member meets repurchase expectations, the staff proposes that recognition be given to the member by publicizing the event in the context of Article IV or post-program monitoring (PPM) discussions in the Public Information Notice (PIN). The statement would be limited to factual reporting that the member will be repaying ahead of the obligation schedule, as the specific circumstances of the member would be provided in the rest of the PIN. Further detail on the member's circumstances would be available in the Board documents, should the member choose to have them published.

7. When a member requests and is granted an extension of repurchase expectations, the staff proposes that a brief factual statement to this effect be posted on the member's country-specific page on the Fund's website, and that the granting of the request be noted in the next weekly update of "Fund Financial Activities: Week at a Glance" on the website.³ Directors expressed some concern that markets may misunderstand the meaning of extensions of repurchase expectations, and that any publicity that a member is not on the expectation schedule, no matter how low key, could raise concerns about the member's external position. There are several important reasons to publicize the Board's decision to extend early repurchase expectations:

• Lack of a notification by the Fund that the member is no longer adhering to the expectations schedule could undermine the credibility of the Fund's commitment to transparency.

• The absence of clear information on the status of members' repurchase expectations could suggest that the Fund itself views the extensions of early repurchase expectations in a negative light.

• There is a need to ensure that the Fund would not be engaged in misinformation. A member could be in a position to meet repurchase expectations on the date of an Article IV consultation or PPM discussion, which would be recognized in the PIN following this discussion. However, the same member could request an extension soon thereafter. This would lead to a situation where the Fund had publicized a member's meeting of repurchase expectations but was not able to notify the public of the change in that member's status until the occasion of the next Article IV or PPM discussion, which could be some way off.

8. At the same time, the staff would not propose that additional attention be drawn to extensions of repurchase expectations through the release of a PIN or a Chairman's statement. This course of action would be consistent with the position that the fact that a member is supposed to meet its repurchase obligations is not news.

9. The staff would propose that the statement posted on the website be along the following lines: "With respect to the arrangement for country x approved by the Fund on [mm, dd, yy], the Executive Board approved on [mm, dd, yy] country x's request to amend the repurchase expectation schedule and country x will accordingly adhere instead to the repurchase obligation schedule [for all repurchase expectations arising from [mm, dd, yy] to [mm, dd, yy]] / [for all remaining expectations under the arrangement]." A link would take the reader to a description of the Fund's policy as regards repurchase expectations and obligations, which would emphasize that Fund-supported programs are formulated in such a way as to allow the member to meet repurchase obligations, rather than repurchase expectations, and that an extension of repurchase expectations is granted if a member's external position does not turn out sufficiently strong to allow it to repay early.

10. The staff would not propose to make additional statements clarifying the events. If the member thinks that it is desirable to provide additional information, it could consent to the publication of the Board paper supporting the request for extension.

Missing repurchase expectations

11. When a member misses repurchase expectations without the Board's having granted an extension, the staff proposes publication after a period of six months. This would ensure that missed expectations are not made public earlier than arrears to the Fund. The Fund's arrears strategy, including its transparency aspects, will be reviewed in June 2001, and the policy on the publication of missed expectations could be reconsidered at that time. In any event, cases of missed expectations without the Board having granted an extension are likely to be very rare. A missed expectation would in the first instance lead to intensified contacts of staff and management with the member concerned. The Executive Board would be notified one month after the missed expectation, and the issue would be considered by the Board after three months. The process of consultation would give the member ample opportunity either to meet the expectation or, if its external position is not strong enough for it to do so, to request a postponement expeditiously. Publication of missed expectations would thus occur only in the very rare cases where the issue was not resolved within six months.