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Press Release: Global Cooperation Role Takes Center Stage in New IMF Work Program
December 2, 2010
The International Monetary Fund (IMF) will concentrate its efforts for the period ahead on promoting balanced and sustainable global recovery, a well functioning international monetary system, and a stronger global financial architecture IMF Managing Director Dominique Strauss-Kahn stated in the IMF's bi-annual work program. The program, which was published today, highlights new initiatives in all these areas, while also emphasizing the Fund’s continued commitment to support low-income countries.
“The focus of our work program is consistent with the key priorities highlighted in the IMFC Communiqué in October as well as the G-20 Leaders’ Seoul Action Plan. With the program, we will intensify our focus on global policy cooperation, which will be key to ensure a more balanced global economic recovery, to ease existing strains in the international monetary system, and build a strong global financial architecture,” Mr. Strauss-Kahn told the Executive Board during the presentation of the work program.
Global policy cooperation
The initial spillover reports for China, the Euro Area, Japan, United Kingdom and the United States are scheduled to be published in the second half of 2011. The reports will assess the impact of domestic policies of these systemic countries beyond their borders, and will also contribute to the IMF’s broader surveillance efforts.
In addition, the IMF will continue to support the G-20 Mutual Assessment Process (MAP) by analyzing the adequacy of G-20 policies to promote global rebalancing and suggesting possible policy adjustments.
International Monetary System
Work in this important area will include a combination of analyses and strong multilateral policy instruments. In particular, the Executive Board will start discussing the case for a multilateral framework to analyze and deal with cross-border capital flows in December 2010, followed by discussions of specific country experiences and of the Fund’s policy advice to countries dealing with strong capital inflows.
The Fund will assess the costs and benefits of precautionary official reserve holdings and will take a broader look at the role that global financial safety nets play in mitigating systemic crises. The Executive Board is also scheduled to examine the case for enhancing the role of Special Drawing Rights (SDRs) as a reserve asset and unit of account in early-2011. Finally, the Board will discuss a concept note for the Triennial Surveillance Review and Review of the 2007 Decision on Bilateral Surveillance, which is planned for Fall 2011 and will be an opportunity to consider how IMF surveillance can further support the good functioning of the international monetary system.
Financial architecture
With regard to financial regulatory architecture, the work program foresees building on the recent Basel III agreement, with the Board focusing on macro-prudential surveillance, including the implications of quantitative easing on financial stability, crisis management and resolution, standards assessments, and data gaps.
Low income countries
Building on the Fund’s work in low income countries (LIC), the Fund will present the drivers for growth for LICs which will highlight the opportunities and challenges arising from the growing role of the BRICs in the LICs economic development. Furthermore, the IMF will review its relationship with countries in fragile situations to consider how its engagement should be tailored to meet the unique challenges of this group of LICs
“Only cooperative approaches will succeed in relieving the tensions in the global economy, and building and strong and sustainable recovery. Our work program is designed to address these issues and help our membership meet these challenges,” Mr. Strauss-Kahn concluded.
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