## Statement by the Managing Director on the Independent Evaluation Office Report on the IMF’s Exceptional Access Policy

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**Canonical URL:** [Statement by the Managing Director on the Independent Evaluation Office Report on the IMF’s Exceptional Access Policy](https://www.imf.org/-/media/files/publications/pp/2024/english/ppea2024063.pdf)

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### Context and timing
- November 25, 2024 — Statement by the Managing Director on the IEO report on the IMF’s Exceptional Access Policy (EAP).
- Executive Board Meeting: December 5, 2024.
- Evaluation period covered: from the EAP’s inception in 2002 through mid-2023 (the launch of the evaluation).
- Empirical basis: experience with 38 Exceptional Access (EA) arrangements during the evaluation period.
- Past policy reviews and modifications: one comprehensive review in 2004; policy examined/modified in 2009, 2010, and 2016.

### Findings from the Managing Director’s statement
- The EAP moved the Fund beyond an ad-hoc approach to Exceptional Access by curtailing discretion and requiring a more deliberate and systematic consideration of key aspects of EA programs.
- The EAP provided a framework for higher scrutiny in EA cases via substantive Exceptional Access Criteria (EAC) and procedural safeguards, while retaining room for judgment in assessing whether criteria were met.
- The global context at EAP inception (the Great Moderation) featured rapid trade integration, strong global growth, low inflation, and accommodative financial conditions—conditions that have since materially changed.
- Subsequent large systemic shocks (Global Financial Crisis, European sovereign debt crisis, COVID-19 pandemic, conflicts, geoeconomic fragmentation) have:
  - Weakened global growth prospects.
  - Eroded policy buffers.
  - Increased the world’s exposure to shocks.
  - Increased social strains.
  - Shifted member usage from Standby Arrangement (SBA) to Extended Fund Facility (EFF), reflecting more protracted balance of payments (BOP) needs.
- The EAP’s focus on debt sustainability, the Fund’s catalytic role, program ownership, and capacity to deliver on commitments remains fundamental.
- No one-size-fits-all solution exists; the EAP needs to be robust yet nimble to assist members in heterogeneous and evolving conditions while preserving safeguards.

### Overarching management approach to implementation
- Management will prepare a Management Implementation Plan (MIP) that draws on the IEO’s suggestions, ensures synergies with existing workstreams, and is mindful of resource constraints.
- Responses will target core issues with the greatest impact on the EAP framework and leverage existing ongoing workstreams to operationalize recommendations where needed.
- Resource implications of each recommendation are a key consideration; flexibility in timing and format of any comprehensive review is emphasized.

### Recommendation 1 — EAP Review (Position: Qualified Support)
- Core recommendation: Conduct a dedicated review of the EAP and schedule subsequent reviews on a regular basis; reviews should consider strategic issues including adequacy of access limits and balance between rules and flexibility.
- IEO-suggested specific steps for MIP consideration:
  - Regular reviews: Regular, thorough, and inclusive reviews to assess policy performance, relevance, and effectiveness.
  - Adequacy of existing access limits: Assess how access limits serve members’ BOP needs, evolving circumstances, and quota erosion.
  - Transparent use of flexibility: Consider whether the Exceptional Circumstances (EC) clause warrants change.
- Managing Director’s qualifiers:
  - Supports a dedicated review but stresses flexibility in timing/format given resource requirements and unique EA characteristics.
  - Advocates a broader lens (including PRGT/blend considerations) despite the evaluation’s limited depth on those issues.
  - Expresses reservations about reintroducing an EC clause due to risks of stigmatization, market re-access effects, and challenges in ringfencing its use.

### Recommendation 2 — Program design (Position: Qualified Support)
- Core recommendation: Clarify the role of sound program design in providing higher safeguards in EA cases relative to non-exceptional (NA) cases; staff reports should justify policy choices/trade-offs and disclose related risks to the Board.
- IEO-suggested specific steps for MIP consideration:
  - Justification of program design: Staff reports should articulate reasons for key policy choices, trade-offs, risks of not having an EA program, and consistency with prospects for program success.
  - Refocusing of EAC4: Enhance EAC4 to emphasize coherence of program components and interrelation of EACs.
  - Guidance on political and institutional capacity: Develop clearer guidance for assessing authorities’ political/institutional capacity and program ownership.
  - Program duration and phasing: Calibrate duration, phasing, and frontloading to members’ needs and BOP problem nature.
  - Guidance on communications: Recognize criticality of public communications in EA cases.
- Managing Director’s qualifiers and remarks:
  - Affirms that all Fund programs must meet Upper Credit Tranche (UCT) standards; EAP applies stricter substantive and procedural requirements but maintains a single UCT-quality standard across Fund-supported programs.
  - Emphasizes the need to balance additional rigor with practical applicability across heterogeneous situations.
  - Welcomes ongoing staff work on clearer guidance for assessing political assurances and institutional capacity and suggests leveraging existing guidance (Operational Guidance Note on Program Design and Conditionality).
  - Supports recognizing the importance of communications in EA cases.

### Recommendation 3 — Exceptional Access Criteria (EACs) (Position: Qualified Support)
- Core recommendation: Address technical gaps in EACs to better align with policy objectives and enhance evenhandedness by:
  - (i) increasing scrutiny for access decisions;
  - (ii) clarifying expectations when debt is in the “gray zone,” revisiting terminology and signaling, and clarifying roles of different debt types and creditors for debt sustainability; and
  - (iii) developing consistent analytical guidance to assess market access prospects.
- IEO-suggested specific steps for MIP consideration:
  - EAC1: Greater scrutiny of access decisions for gray zone cases; discuss options if financing needs deviate materially from projections.
  - EAC2 and EAC3: Clarify expectations that gray zone cases would return to sustainability with high probability by program end; revisit “debt sustainability with high probability” terminology; develop consistent forward-looking guidance for market access prospects (EAC3).
- Managing Director’s qualifiers and remarks:
  - Supports assessing options to increase EAC effectiveness but notes resource implications and the risk that additional analytical frameworks could give false comfort or false alarms.
  - Emphasizes continued role for judgment supplementing frameworks.
  - Notes prior debate on gray zone reversion expectations and urges further reflection based on recent data to avoid increasing risk of deeper restructurings and undermining program success.

### Recommendation 4 — EAP procedures and Ex-Post Evaluations (EPEs) (Position: Support)
- Core recommendation: Strengthen application of enhanced EAP procedures and better leverage EPEs for risk mitigation, accountability, and learning.
- IEO-suggested specific steps for MIP consideration:
  - Enhanced decision-making procedures: Improve information provided to the Board while preserving management’s maneuvering room, staff negotiation flexibility, and authorities’ prerogatives.
  - Ex post evaluations: Ensure more systematic follow-up by staff, fuller focus on EPE mandates, greater Board attention, adequate independence for EPE leaders/teams, and consider a roster of EPE leads and an interdepartmental review group.
- Managing Director’s remarks:
  - Strongly agrees with early and regular Board consultation per EA procedures while preserving confidentiality and negotiation effectiveness.
  - Agrees with strengthening EPEs via implementation procedures and more systematic follow-up, while maintaining adaptability on which recommendations to implement.
  - Welcomes transparency measures for EPEs including a roster of EPE leads and interdepartmental review mechanisms.

### Recommendation 5 — Enterprise Risk Management (ERM) (Position: Support)
- Core recommendation: Increase coherence between the EAP and the IMF’s ERM policy to ensure a common institutional understanding of how the EAP mitigates enterprise risks consistent with the Fund’s risk tolerance in lending.
- IEO-suggested specific steps for MIP consideration:
  - Consistency: Align EAP provisions with ERM and ensure ERM accounts for risks associated with EA and their mitigation by the EAP.
  - Risk analysis in program documents: Build on progress to enhance presentation of enterprise risks in EA program cases.
  - Office of Risk Management (ORM): As ORM capacity develops, consider giving it greater responsibility for supplements as the second line of defense.
- Managing Director’s remarks:
  - Agrees on the need for coherence between EAP and ERM and the importance of timely risk disclosures to the Executive Board.
  - Primary responsibility for granular risk information remains with area departments in close consultation with review departments, including ORM.
  - Sees value in leveraging Enterprise Risk Assessment as a disclosure and accountability mechanism and to inform the Board about risks in EA programs systematically and confidentially as needed.

### Table of positions on main IEO recommendations
- 1. Exceptional Access Policy Review — Qualified Support
- 2. Program design in Exceptional Access Cases — Qualified Support
- 3. Exceptional Access Criteria — Qualified Support
- 4. Exceptional Access Policy procedures and Ex-Post Evaluations — Support
- 5. Enterprise Risk Management — Support

*Statement by the Managing Director on the Independent Evaluation Office Report on the IMF’s Exceptional Access Policy, November 25, 2024.*

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_Source: https://www.imf.org/-/media/files/publications/pp/2024/english/ppea2024063.pdf_