## EXECUTIVE SUMMARY

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---

### Introduction and purpose
- This management implementation plan (MIP) proposes actions in response to the Independent Evaluation Office (IEO)’s report on The IMF’s Financial Surveillance.
- Executive Directors and Management welcomed the IEO’s recognition that recent initiatives delivered a substantial upgrade to the Fund’s work on financial surveillance and broadly endorsed its recommendations.
- Staff has already begun responding to the Board-endorsed IEO recommendations and proposes a package of additional mutually-reinforcing actions.
- Several proposed actions have already been incorporated into departmental budgets for fiscal year (FY) 2020; thus this MIP has minimal near-term resource implications.
- Medium-term resource implications will depend on the follow-up to the Financial Sector Assessment Program (FSAP) and Comprehensive Surveillance Reviews (CSR) and discussions are expected to be initiated in the context of the FY2021–23 Medium-term Budget.

### IEO recommendations (as presented)
- 1—Strengthening financial and macrofinancial analysis in Article IV surveillance: deepen financial and macrofinancial analysis in Article IV consultations; better integrate FSAP analysis in Article IV consultations; increase financial skills and expertise among staff.
- 2—Refocusing FSAP country selection and scope: revisit allocation of FSAP resources for a more flexible, dynamic, and risk-based allocation across countries and issues.
- 3—Increasing traction of multilateral surveillance: enhance impact of multilateral surveillance by increasing rigor and transparency, and deepening collaboration with international partners.
- 4—Enhancing the IMF’s analytical tools: strengthen efforts to be a global center of excellence on financial and macrofinancial research.
- 5—Building financial skills and expertise: intensify efforts to attract, develop, and retain deeper financial talent and ensure area department fungible macroeconomists can integrate financial and macrofinancial analysis into Article IV consultations.
- 6—Increasing budgetary resources: consider devoting significant additional resources to financial surveillance.

### Implementation highlights and SMART actions (by recommendation)

- Recommendation 1 — Strengthening Financial and Macrofinancial Analysis in Article IV Surveillance
  - Board endorsed recommendation 1 with proposals to be presented in the Comprehensive Surveillance Review (CSR).
  - CSR, in conjunction with the FSAP Review, to be discussed at the Board in Spring 2020, will recommend further strengthening financial and macrofinancial analysis in Article IV surveillance and present proposals including:
    - deepening integration of FSAP analysis into Article IVs;
    - facilitating follow-up of FSAP findings;
    - strengthening systemic financial risk assessments in Article IV consultations;
    - a proposal to increase MCM resources to support Area Departments;
    - assessing data gaps for an evolving macrofinancial surveillance landscape;
    - aligning staff skills with financial surveillance priorities in coordination with the HR Strategy.
  - Staff will publish within one year from the completion of the CSR an updated guidance note on surveillance under Article IV consultations laying out practical steps to implement the Board-approved CSR recommendations, including on financial surveillance.
  - Knowledge Exchange country pages have been revamped to include information on FSAP missions, Financial System Stability Assessment (FSSA) reports, and non-confidential technical notes to facilitate follow-up of FSAP recommendations; staff will continue this practice on an ongoing basis.

- Recommendation 2 — Refocusing FSAP Country Selection and Scope
  - Executive Board broadly endorsed recommendation 2; specific proposals to be presented in the FSAP Review.
  - FSAP Review, to be discussed by the Board in Spring 2020, will present proposals on:
    - country participation, including a more risk-based approach to country coverage and frequency of assessments while ensuring evenhandedness and transparency in the selection process;
    - better balancing standardization and customization of financial stability assessments.
  - Resource implications from the follow-up to the FSAP Review will be considered in the context of the medium-term budget discussions.

- Recommendation 3 — Increasing Traction of Multilateral Surveillance
  - Directors supported increasing GFSR transparency and accessibility, making more GFSR data and analysis available online where possible, and adapting GFSR presentation for country officials.
  - MCM introduced a new risk assessment framework systematically linking financial conditions, financial vulnerabilities, and Growth-at-Risk (GaR) analysis that premiered in the April 2019 GFSR; further details were presented to the Board in May 2019.
  - Staff proposes publishing online annexes with additional details on data and methodologies again in the Fall 2019 GFSR, subject to copyright and confidentiality constraints, and will make text and figures more accessible to the target audience.
  - Staff continues to deepen collaboration with international partners:
    - 2018: collaboration with the FSB on evaluating the impact of reforms on infrastructure finance;
    - February 2019: staff joined a new working group to advise the FSB on a report on the effects of Too-Big-To-Fail (TBTF) reforms, to be published in late 2020;
    - May 2019: staff joined the Basel Consultative Group workstream on tailoring implementation of international regulatory standards and held a conference in May 2019 jointly with the Financial Stability Institute of the BIS.
  - Staff will prepare a Board paper titled “Adapting National Prudential Approaches to the International Reform Agenda: Lessons from Experience,” scheduled for Executive Board discussion in April 2020.
  - On the Early Warning Exercise (EWE), staff will continue exchange with the FSB at the topic selection stage while preserving the Fund’s independent perspective; Management will continue to find ways to disseminate broad themes of EWE presentations.

- Recommendation 4 — Enhancing the IMF Analytical Tools
  - Directors supported continuing to enhance the Fund’s analytical tools to improve understanding of macrofinancial linkages.
  - Research conferences and outreach:
    - April 2018 and April 2019: staff held conferences on macrofinancial linkages;
    - planned: a third conference on macrofinancial linkages in April 2020;
    - October 2019: staff will hold a conference on “Rethinking Financial Stability: The FSAP at 20.”
  - Tool development and methodological work:
    - October 2018: launch of a GaR tool to support macrofinancial analysis in bilateral surveillance; a working paper presenting details was published in February 2019.
    - May 2019: establishment of a new Modeling Unit within MCM to deepen monetary and macroprudential policy modeling work.
    - Upgrade of the corporate vulnerability tool (CVU): the upgraded CVU will significantly expand country and firm coverage and will be rolled out to Fund staff by April 2021.
    - Development of a tool that tracks a broad range of indicators of systemic financial risks across the membership to strengthen cross-country consistency of systemic financial risk assessments in Article IV consultations; a pilot was made available to staff in February 2019 with the final version planned to be rolled out by end-2019.
    - One objective of the FSAP Review is to further strengthen the FSAP’s analytical foundations in macrofinancial linkages, non-bank and cross-sectoral interconnectedness, macroprudential policy, emerging risks, and stress testing.
    - Other initiatives at the design stage include creating an inventory of all tools related to financial surveillance and exploring upgrades in real estate sector vulnerabilities, early detection of harmful credit booms, consistency of macroeconomic frameworks with financial sector developments, and bank networks.

- Recommendation 5 — Building Financial Skills and Expertise
  - Directors supported intensifying efforts to attract, develop, and retain deeper financial talent and to ensure area department macroeconomists have the knowledge and support to integrate financial analysis into Article IV consultations.
  - Actions referenced across the MIP:
    - HR Strategy coordination to align staff skills with financial surveillance priorities.
    - Conferences and training to deepen staff skills (see Recommendation 4 conference schedule).
    - Establishment of the MCM Modeling Unit (May 2019) to deliver technical expertise and support country teams.

- Recommendation 6 — Increasing Budgetary Resources
  - The IEO recommended considering significant additional resources for financial surveillance.
  - Several MIP actions have been incorporated into departmental work plans and budgets for FY2020, implying limited near-term resource implications.
  - Medium-term resource implications will depend on follow-up to the FSAP Review and CSR and will be addressed in the FY2021–23 Medium-term Budget discussions.

### Key timelines and milestones (as stated)
- Several actions incorporated into departmental budgets for FY2020.
- CSR and FSAP Review: to be discussed at the Board in Spring 2020.
- Staff to publish an updated guidance note on Article IV surveillance within one year from the completion of the CSR.
- GaR framework premiered in the April 2019 GFSR; further details presented May 2019.
- GaR tool launched October 2018; working paper published February 2019.
- Modeling Unit established in MCM in May 2019.
- CVU upgrade to be rolled out to Fund staff by April 2021.
- Pilot systemic risk tracking tool available to staff in February 2019; final version planned to be rolled out by end-2019.
- Board paper on adapting prudential approaches scheduled for April 2020.
- FSAP-related Board discussion in Spring 2020.
- TBTF FSB report: staff participation in working group; report to be published in late 2020.
- Conferences: April 2020 (macrofinancial linkages); October 2019 (“Rethinking Financial Stability: The FSAP at 20”); April 2018 and April 2019 conferences held.

### Section: 8. Directors supported recommendation 5 with key enhancements to the HR strategy

- Board reactions
  - Directors underscored that it is critical to ensure that country teams have the knowledge and support to integrate financial and macrofinancial analysis into Article IV consultations.
  - Directors noted that targeted enhancements from the HR Strategy can help ensure that Fund staff develop the expertise needed for effective macrofinancial surveillance.
  - Directors looked forward to discussing issues pertaining to attracting and retaining a deeper pool of financial talent in the context of the Comprehensive Compensation and Benefits Review (CCBR).

- Implementation plan and HR Strategy actions
  - The IEO report recognized the Fund’s considerable training and recruitment efforts to upgrade staff’s macrofinancial skills, achieved mostly through greater reliance on the hiring of mid-career economists.
  - Specific recruitment and staffing facts:
    - The share of mid-career hires relative to total was 67 percent in 2018.
    - Nearly 40 percent of mid-career hires in 2018 were hired by MCM.
    - About a quarter of all new hires had macro-financial expertise.
    - Financial sector experts in the Fund tripled in the last decade.
  - Remaining need:
    - The IEO report noted a general need to enrich staff knowledge and experience in macrofinancial analysis.
  - HR Strategy rollout and components:
    - The new HR Strategy will be rolled out through FY2021 and will include strategic workforce planning supported by a talent inventory of staff (with expertise profiles, including macrofinancial), a career mobility framework facilitated by a playbook, and an expert track.
    - HRD will brief the Executive Board on the implementation of the HR strategy, including on the ongoing workforce analysis for financial sector experts, by January 2020 (see proposed action in Annex I).
    - HRD will continue to publish online details on programs, policies, and guidelines as each initiative is rolled out.
  - Specific steps and timelines expected to help ensure an adequate pool of financial talent:
    - Launch of an enhanced career mobility framework along with a career playbook for all job families, including for financial sector experts by January 2020.
    - Completion of an enhanced talent inventory of staff by November 2020, which will include talent profiles for financial sector experts and data on macrofinancial (and other) experiences of fungible macroeconomists.
    - As the last of the HR strategy initiatives will be launched in FY2021, HRD will provide a Fund-wide update on implementation details, including by publishing these on the Fund’s intranet by April 2022.

- Training and capacity-building actions
  - ICD training events and plans:
    - The Institute for Capacity Development (ICD) increased the number of training events in the macrofinancial area to 17 in 2018 (up from 14 in 2017) and plans to offer 19 events in 2019.
  - Internal economics training program:
    - Staff is revamping the internal economics training program to increase regular hands-on workshops in critical macrofinancial areas for country teams to understand and practice new analytical tools.
    - In April 2019, ICD, in cooperation with MCM, launched the first hands-on training workshop on the GaR tool, with a second one tentatively planned for December 2019 (included among the proposed training events).
    - Hands-on training opportunities are intended to reinforce the impact of completed and planned actions to upgrade the macrofinancial analytical toolkit.

- Recommendation 6 and budgetary resources
  - Board reactions:
    - Directors agreed that to fully meet its responsibilities and objectives, the Fund should devote adequate resources to strengthening financial surveillance and concurred with the need for additional resources for this work.
    - Most Directors considered that an increase in resources should come from reallocation of some resources from other activities and seeking efficiencies. A few Directors thought that there should be an overall budget increase.
    - Many Directors called for costed options for resource reallocation to help the Board in making an informed decision.
    - Directors noted that relevant tradeoffs will be considered in the context of the Fund’s budget discussions, the FSAP Review, and the CSR.
  - Implementation plan and budget facts:
    - The FY2020 budget allocated, in gross terms, an additional US$2.0 million (6 percent annual increase) to MCM to enhance bilateral financial surveillance, of which nearly half was funded through streamlining the number of GFSR chapters.
    - The FY2021–23 Medium-term Budget discussion, to take place during February-April of 2020, will consider the ongoing FSAP Review and CSR and reflect on medium-term trade-offs, areas of comparative advantage, and strategic objectives defined by the Executive Board.

- Resource implications
  - Near-term:
    - The new initiatives outlined would have marginal resource implications in the near term.
    - Several actions proposed in this MIP have already been incorporated into departmental work plans and budgets for FY2020; therefore, the additional near-term costs resulting from this MIP are expected to be minor.
  - Medium-term:
    - Medium-term resource implications will depend on the follow-up to the CSR and FSAP Review.
    - Discussions of resource needs for financial surveillance are expected to be initiated in the context of the FY2021–23 Medium-term Budget, with changes to be implemented over time.

*Source: ppea2019037 - 8.      Directors supported recommendation 5 with key enhancements to the HR strategy*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Introduction and purpose
- This management implementation plan (MIP) proposes actions in response to the Independent Evaluation Office (IEO)’s report on The IMF’s Financial Surveillance.
- Executive Directors and Management welcomed the IEO’s recognition that recent initiatives delivered a substantial upgrade to the Fund’s work on financial surveillance and broadly endorsed its recommendations.
- Staff has already begun responding to the Board-endorsed IEO recommendations and proposes a package of additional mutually-reinforcing actions.
- Several proposed actions have already been incorporated into departmental budgets for fiscal year (FY) 2020; thus this MIP has minimal near-term resource implications.
- Medium-term resource implications will depend on the follow-up to the Financial Sector Assessment Program (FSAP) and Comprehensive Surveillance Reviews (CSR) and discussions are expected to be initiated in the context of the FY2021–23 Medium-term Budget.

### IEO recommendations (as presented)
- 1—Strengthening financial and macrofinancial analysis in Article IV surveillance: To improve the relevance and traction of bilateral financial surveillance, the IMF needs to deepen financial and macrofinancial analysis, particularly in Article IV consultations, including by taking practical steps to better integrate FSAP analysis in Article IV consultations and by increasing financial skills and expertise among staff.
- 2—Refocusing FSAP country selection and scope: The IMF should revisit the current approach to allocating FSAP resources to achieve a more flexible, dynamic, and risk-based allocation across countries and issues.
- 3—Increasing traction of multilateral surveillance: The IMF should continue to work to enhance the impact of IMF multilateral surveillance by increasing rigor and transparency, and by deepening collaboration with international partners.
- 4—Enhancing the IMF’s analytical tools: To enhance the value added of its financial surveillance, the IMF should strengthen efforts to be a global center of excellence on financial and macrofinancial research.
- 5—Building financial skills and expertise: The IMF should intensify efforts to attract, develop, and retain a deeper pool of financial talent, as well as to ensure that area department fungible macroeconomists have the knowledge and support to integrate financial and macrofinancial analysis into Article IV consultations.
- 6—Increasing budgetary resources: To fully meet its responsibilities and objectives, the IMF should consider devoting significant additional resources to financial surveillance.

### Implementation highlights and SMART actions (by recommendation)

- Recommendation 1 — Strengthening Financial and Macrofinancial Analysis in Article IV Surveillance
  - Board endorsed recommendation 1 with proposals to be presented in the Comprehensive Surveillance Review (CSR).
  - CSR, in conjunction with the FSAP Review, to be discussed at the Board in Spring 2020, will recommend further strengthening financial and macrofinancial analysis in Article IV surveillance and present proposals including:
    - deepening integration of FSAP analysis into Article IVs;
    - facilitating follow-up of FSAP findings;
    - strengthening systemic financial risk assessments in Article IV consultations;
    - a proposal to increase MCM resources to support Area Departments;
    - assessing data gaps for an evolving macrofinancial surveillance landscape;
    - aligning staff skills with financial surveillance priorities in coordination with the HR Strategy.
  - Staff will publish within one year from the completion of the CSR an updated guidance note on surveillance under Article IV consultations laying out practical steps to implement the Board-approved CSR recommendations, including on financial surveillance.
  - Knowledge Exchange country pages have been revamped to include information on FSAP missions, Financial System Stability Assessment (FSSA) reports, and non-confidential technical notes to facilitate follow-up of FSAP recommendations; staff will continue this practice on an ongoing basis.

- Recommendation 2 — Refocusing FSAP Country Selection and Scope
  - Executive Board broadly endorsed recommendation 2; specific proposals to be presented in the FSAP Review.
  - FSAP Review, to be discussed by the Board in Spring 2020, will present proposals on:
    - country participation, including a more risk-based approach to country coverage and frequency of assessments while ensuring evenhandedness and transparency in the selection process;
    - better balancing standardization and customization of financial stability assessments.
  - Resource implications from the follow-up to the FSAP Review will be considered in the context of the medium-term budget discussions.

- Recommendation 3 — Increasing Traction of Multilateral Surveillance
  - Directors supported increasing GFSR transparency and accessibility, making more GFSR data and analysis available online where possible, and adapting GFSR presentation for country officials.
  - MCM introduced a new risk assessment framework systematically linking financial conditions, financial vulnerabilities, and Growth-at-Risk (GaR) analysis that premiered in the April 2019 GFSR; further details were presented to the Board in May 2019.
  - Staff proposes publishing online annexes with additional details on data and methodologies again in the Fall 2019 GFSR, subject to copyright and confidentiality constraints, and will make text and figures more accessible to the target audience.
  - Staff continues to deepen collaboration with international partners:
    - 2018: collaboration with the FSB on evaluating the impact of reforms on infrastructure finance;
    - February 2019: staff joined a new working group to advise the FSB on a report on the effects of Too-Big-To-Fail (TBTF) reforms, to be published in late 2020;
    - May 2019: staff joined the Basel Consultative Group workstream on tailoring implementation of international regulatory standards and held a conference in May 2019 jointly with the Financial Stability Institute of the BIS.
  - Staff will prepare a Board paper titled “Adapting National Prudential Approaches to the International Reform Agenda: Lessons from Experience,” scheduled for Executive Board discussion in April 2020.
  - On the Early Warning Exercise (EWE), staff will continue exchange with the FSB at the topic selection stage while preserving the Fund’s independent perspective; Management will continue to find ways to disseminate broad themes of EWE presentations.

- Recommendation 4 — Enhancing the IMF Analytical Tools
  - Directors supported continuing to enhance the Fund’s analytical tools to improve understanding of macrofinancial linkages.
  - Research conferences and outreach:
    - April 2018 and April 2019: staff held conferences on macrofinancial linkages;
    - planned: a third conference on macrofinancial linkages in April 2020;
    - October 2019: staff will hold a conference on “Rethinking Financial Stability: The FSAP at 20.”
  - Tool development and methodological work:
    - October 2018: launch of a GaR tool to support macrofinancial analysis in bilateral surveillance; a working paper presenting details was published in February 2019.
    - May 2019: establishment of a new Modeling Unit within MCM to deepen monetary and macroprudential policy modeling work.
    - Upgrade of the corporate vulnerability tool (CVU): the upgraded CVU will significantly expand country and firm coverage and will be rolled out to Fund staff by April 2021.
    - Development of a tool that tracks a broad range of indicators of systemic financial risks across the membership to strengthen cross-country consistency of systemic financial risk assessments in Article IV consultations; a pilot was made available to staff in February 2019 with the final version planned to be rolled out by end-2019.
    - One objective of the FSAP Review is to further strengthen the FSAP’s analytical foundations in macrofinancial linkages, non-bank and cross-sectoral interconnectedness, macroprudential policy, emerging risks, and stress testing.
    - Other initiatives at the design stage include creating an inventory of all tools related to financial surveillance and exploring upgrades in real estate sector vulnerabilities, early detection of harmful credit booms, consistency of macroeconomic frameworks with financial sector developments, and bank networks.

- Recommendation 5 — Building Financial Skills and Expertise
  - Directors supported intensifying efforts to attract, develop, and retain deeper financial talent and to ensure area department macroeconomists have the knowledge and support to integrate financial analysis into Article IV consultations.
  - Actions referenced across the MIP:
    - HR Strategy coordination to align staff skills with financial surveillance priorities.
    - Conferences and training to deepen staff skills (see Recommendation 4 conference schedule).
    - Establishment of the MCM Modeling Unit (May 2019) to deliver technical expertise and support country teams.

- Recommendation 6 — Increasing Budgetary Resources
  - The IEO recommended considering significant additional resources for financial surveillance.
  - Several MIP actions have been incorporated into departmental work plans and budgets for FY2020, implying limited near-term resource implications.
  - Medium-term resource implications will depend on follow-up to the FSAP Review and CSR and will be addressed in the FY2021–23 Medium-term Budget discussions.

### Key timelines and milestones (as stated)
- Several actions incorporated into departmental budgets for FY2020.
- CSR and FSAP Review: to be discussed at the Board in Spring 2020.
- Staff to publish an updated guidance note on Article IV surveillance within one year from the completion of the CSR.
- GaR framework premiered in the April 2019 GFSR; further details presented May 2019.
- GaR tool launched October 2018; working paper published February 2019.
- Modeling Unit established in MCM in May 2019.
- CVU upgrade to be rolled out to Fund staff by April 2021.
- Pilot systemic risk tracking tool available to staff in February 2019; final version planned to be rolled out by end-2019.
- Board paper on adapting prudential approaches scheduled for April 2020.
- FSAP-related Board discussion in Spring 2020.
- TBTF FSB report: staff participation in working group; report to be published in late 2020.
- Conferences: April 2020 (macrofinancial linkages); October 2019 (“Rethinking Financial Stability: The FSAP at 20”); April 2018 and April 2019 conferences held.

*Prepared by Fabian Valencia (team leader), Juliana Araujo, and Patrick Gitton (Strategy, Policy and Review Department) in collaboration with MCM, HRD, ICD, KMU, OBP, RES, and STA. October 17, 2019.*

### 8.      Directors supported recommendation 5 with key enhancements to the HR strategy

### 8.      Directors supported recommendation 5 with key enhancements to the HR strategy

### Board reactions
- Directors underscored that it is critical to ensure that country teams have the knowledge and support to integrate financial and macrofinancial analysis into Article IV consultations.
- Directors noted that targeted enhancements from the HR Strategy can help ensure that Fund staff develop the expertise needed for effective macrofinancial surveillance.
- Directors looked forward to discussing issues pertaining to attracting and retaining a deeper pool of financial talent in the context of the Comprehensive Compensation and Benefits Review (CCBR).

### Implementation plan and HR Strategy actions
- The IEO report recognized the Fund’s considerable training and recruitment efforts to upgrade staff’s macrofinancial skills, achieved mostly through greater reliance on the hiring of mid-career economists.
- Specific recruitment and staffing facts:
  - The share of mid-career hires relative to total was 67 percent in 2018.
  - Nearly 40 percent of mid-career hires in 2018 were hired by MCM.
  - About a quarter of all new hires had macro-financial expertise.
  - Financial sector experts in the Fund tripled in the last decade.
- Remaining need:
  - The IEO report noted a general need to enrich staff knowledge and experience in macrofinancial analysis.
- HR Strategy rollout and components:
  - The new HR Strategy will be rolled out through FY2021 and will include strategic workforce planning supported by a talent inventory of staff (with expertise profiles, including macrofinancial), a career mobility framework facilitated by a playbook, and an expert track.
  - HRD will brief the Executive Board on the implementation of the HR strategy, including on the ongoing workforce analysis for financial sector experts, by January 2020 (see proposed action in Annex I).
  - HRD will continue to publish online details on programs, policies, and guidelines as each initiative is rolled out.
- Specific steps and timelines expected to help ensure an adequate pool of financial talent:
  - Launch of an enhanced career mobility framework along with a career playbook for all job families, including for financial sector experts by January 2020.
  - Completion of an enhanced talent inventory of staff by November 2020, which will include talent profiles for financial sector experts and data on macrofinancial (and other) experiences of fungible macroeconomists.
  - As the last of the HR strategy initiatives will be launched in FY2021, HRD will provide a Fund-wide update on implementation details, including by publishing these on the Fund’s intranet by April 2022.

### Training and capacity-building actions
- ICD training events and plans:
  - The Institute for Capacity Development (ICD) increased the number of training events in the macrofinancial area to 17 in 2018 (up from 14 in 2017) and plans to offer 19 events in 2019.
- Internal economics training program:
  - Staff is revamping the internal economics training program to increase regular hands-on workshops in critical macrofinancial areas for country teams to understand and practice new analytical tools.
  - In April 2019, ICD, in cooperation with MCM, launched the first hands-on training workshop on the GaR tool, with a second one tentatively planned for December 2019 (included among the proposed training events).
  - Hands-on training opportunities are intended to reinforce the impact of completed and planned actions to upgrade the macrofinancial analytical toolkit.

### Recommendation 6 and budgetary resources
- Board reactions:
  - Directors agreed that to fully meet its responsibilities and objectives, the Fund should devote adequate resources to strengthening financial surveillance and concurred with the need for additional resources for this work.
  - Most Directors considered that an increase in resources should come from reallocation of some resources from other activities and seeking efficiencies. A few Directors thought that there should be an overall budget increase.
  - Many Directors called for costed options for resource reallocation to help the Board in making an informed decision.
  - Directors noted that relevant tradeoffs will be considered in the context of the Fund’s budget discussions, the FSAP Review, and the CSR.
- Implementation plan and budget facts:
  - The FY2020 budget allocated, in gross terms, an additional US$2.0 million (6 percent annual increase) to MCM to enhance bilateral financial surveillance, of which nearly half was funded through streamlining the number of GFSR chapters.
  - The FY2021–23 Medium-term Budget discussion, to take place during February-April of 2020, will consider the ongoing FSAP Review and CSR and reflect on medium-term trade-offs, areas of comparative advantage, and strategic objectives defined by the Executive Board.

### Resource implications
- Near-term:
  - The new initiatives outlined would have marginal resource implications in the near term.
  - Several actions proposed in this MIP have already been incorporated into departmental work plans and budgets for FY2020; therefore, the additional near-term costs resulting from this MIP are expected to be minor.
- Medium-term:
  - Medium-term resource implications will depend on the follow-up to the CSR and FSAP Review.
  - Discussions of resource needs for financial surveillance are expected to be initiated in the context of the FY2021–23 Medium-term Budget, with changes to be implemented over time.

*Source: ppea2019037 - 8.      Directors supported recommendation 5 with key enhancements to the HR strategy*

---


_Source: https://www.imf.org/-/media/files/publications/pp/2019/ppea2019037.pdf_