Public Information Notice: IMF Executive Board Discusses Implementation Plan in Response to Board-Endorsed Recommendations for the IEO Evaluation of IMF Performance in the Run-Up to the Financial and Economic Crisis
June 6, 2012
Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.
June 6, 2012
On May 25, 2012, the Executive Board of the International Monetary Fund (IMF) discussed the implementation plan in response to board-endorsed recommendations for the Independent Evaluation Office (IEO) evaluation of IMF performance in the run-up to the financial and economic crisis.
On January 26, 2011, the Executive Board discussed the Independent Evaluation Office’s Evaluation of IMF Performance in the Run-Up to the Financial and Economic Crisis. In that report, the IEO put forward a set of recommendations aimed at making IMF surveillance more effective.
Based on those IEO recommendations that were endorsed by the Board, staff and management have prepared an implementation plan. Consideration of this plan was scheduled to be after the 2011 Triennial Surveillance Review, given that many of the issues raised in the IEO report were also addressed in that context.
Executive Board Assessment
Executive Directors welcomed the opportunity to discuss management’s implementation plan for the Board-endorsed recommendations arising from the Independent Evaluation Office’s (IEO) report on the IMF Performance in the Run-Up to the Financial and Economic Crisis. Directors generally considered that the proposed implementation plan complements well the action plan for the Triennial Surveillance Review (TSR), and together should help enhance the effectiveness of Fund surveillance.
Directors emphasized that a comprehensive long-term approach is needed to tackle the shortcomings highlighted in the IEO report. They broadly supported the specific proposals in the implementation plan, and welcomed management’s statement on an ambitious agenda to break down silos and promote diverse views and candor, further advancing initiatives underway. Directors considered that both sets of proposals provide a good start and encouraged management and staff to continue to build on them, and where appropriate, engage the Board in the process.
Encouraging Candor and Diverse Views
Directors endorsed the actions taken in the context of the TSR to strengthen risk assessments and better identify vulnerabilities and transmission channels. They also supported the action plans to make further progress on staff diversity in all its dimensions, leverage the diverse opinion inside the institution, and seek alternative perspectives from outside the institution as appropriate. Some Directors saw scope for more active engagement by the Board with external experts, including in terms of direct interactions and topic selection. Many Directors favored greater Board involvement in strategic human resource issues. Directors welcomed the establishment of the Working Group on Summings Up Review, and looked forward to its recommendations to management before the 2012 summer recess.
Speaking Up to Power
Directors welcomed the specific proposals in both the implementation plan and the TSR to improve the traction of Fund surveillance. They were encouraged by the work underway to develop a statement of workplace values to guide desired behavioral changes, and a leadership development framework that will clarify expectations at senior levels. A few Directors called for more concrete proposals to ensure that staff views are not influenced by pressure from country authorities. Directors looked forward to examining progress on these issues in the context of the next staff survey.
Integrating Financial Sector Issues into Macroeconomic Assessments
Directors emphasized that more needs to be done to integrate financial stability assessments into bilateral and multilateral surveillance. They viewed the Financial Surveillance Work Agenda as a first step toward the development of a strategic plan for financial sector surveillance, and looked forward to discussing the forthcoming paper.
Breaking Down Silos
Directors recognized that improving departmental collaboration and the Fund’s ability to “connect the dots” is a long-term endeavor. They noted that the implementation plan and the proposed steps in my statement present a rather comprehensive response to the problems identified by the IEO in these areas. In particular, Directors stressed the importance of accountability around a set of institutional priorities and collective ownership through a more consultative budget process, as well as cross-departmental collaboration and mobility. They also agreed that an appropriate balance needs to be struck between promoting staff mobility across country assignments and ensuring continuity in mission teams.
Delivering a Clear and Consistent Message on Outlook/Risks
Directors noted that the Consolidated Multilateral Surveillance Report responds to the IEO recommendation to distill for policymakers the Fund’s key messages on outlook and risks in a consistent and comprehensive manner. A few Directors were of the view that further streamlining multilateral surveillance products would help reduce risks of overlap and conflicting messages. Directors also commended recent efforts to improve the risk focus in all surveillance outputs.
Directors stressed the importance of monitoring and verifying progress on all these fronts in the context of future Periodic Monitoring Reports. They looked forward to revisiting, in a year’s time, matters related to institutional culture, including those identified in my statement, noting that change in this area is a continuous, long-term process that requires ownership and sustained commitment. I realize that, in the view of some, the incremental steps already underway and those proposed today may still not fully address remaining concerns or more fundamental problems—including governance reforms, as noted by a few Directors. We will need to monitor progress and adapt as we go along. Many valuable suggestions have been offered, which I will consider carefully with my management team.