## 1. Persistent challenges. The multi-speed nature of the global economic recovery is ## Source details **Canonical URL:** [1. Persistent challenges. The multi-speed nature of the global economic recovery is](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2010/_112210.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2010/_112210.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2010/_112210.pdf.json) --- ### Persistent challenges and immediate risks - The multi-speed nature of the global economic recovery is testing the system, with strains appearing as large capital inflows to many emerging market countries and exchange rate pressures. - Slow employment growth, high indebtedness, and remaining financial sector fragilities in some countries could derail a fragile recovery. - Only cooperative approaches will succeed in relieving tensions and building a strong and sustainable recovery, based on a more balanced pattern of global growth. ### Quotas and governance breakthrough - Agreement reached on a historical reform of the IMF intended to facilitate needed global cooperation. - Members encouraged to begin work toward ensuring these reforms can take effect by the IMF-World Bank Annual Meetings in October 2012. ### Priorities for IMF work going forward - Reforms over the past two years have better positioned the Fund to help members meet 21st century challenges. - Focus areas going forward: - Balanced and sustainable growth. - A well-functioning international monetary system. - A robust global financial architecture. - Higher growth and stability in low-income countries. ### Medium-term budget and work practices - Demands on the IMF are large and available resources must be commensurate to the tasks ahead; forthcoming discussions on the Medium-term Budget will assess the appropriate budgetary envelope. - Need for a focused agenda and efficient practices: - Executive Board Working Group on Committees has paved the way for important changes in the workings of the Board. - Increased use of lapse-of-time procedures and better prioritization and timing of policy items to focus on strategic country and policy issues while maintaining adaptability. - Staff reduced the number of policy and country surveillance items in peak periods to even out workload; staff is identifying additional lapse-of-time items according to new criteria. - Departments have identified essential items that will, to the extent possible, not be moved. ### I. BALANCED AND SUSTAINABLE GROWTH — Global spillovers and coordination - Inaugural Spillover Reports for China, Euro Area, Japan, United Kingdom, and the United States to coincide with relevant Article IV discussions in July 2011 to analyze domestic policies’ impact beyond borders. - This work will contribute to broader multilateral surveillance and support the G-20 Mutual Assessment Process (MAP) by analyzing joint adequacy of G-20 policies to promote global rebalancing and suggesting policy adjustments. - Following the Seoul Summit, staff will provide further analysis and assessment of G-20 members’ policy progress toward the shared objectives of the G-20 MAP framework. ### I. BALANCED AND SUSTAINABLE GROWTH — Global analysis and Board engagements - Key global publications and meetings: - Spring World Economic Outlook (WEO) and Global Financial Stability Report (GFSR) will be examined, with a joint statement highlighting linkages between real economy and financial sector developments. - The Fiscal Monitor will examine cross-country experience with implementing large fiscal adjustments. - The WEO and GFSR will be discussed on the same day in late March 2011. - WEO analytical chapters will investigate commodity price developments and implications for medium-term growth prospects. - Board will be briefed informally on systemic vulnerabilities identified in the FSB/IMF Early Warning Exercise just ahead of the Spring Meetings. - Fiscal sustainability focus: - Informal Board discussions on Macrofiscal Implications of Health Care Reform in Advanced and Emerging Economies scheduled for January. - Formal discussion on Revenue Mobilization in Developing Countries scheduled for February. - After Spring Meetings, Board will discuss Crisis Experience and Lessons for Managing Sovereign Debt and Debt Markets, examining implications of the post-crisis rise in public debt on perceptions of sovereign risk, debt management policies, and financial stability. - Work will begin on Improving Further the Debt Sustainability Analysis for discussion after the Spring Meetings. ### II. A WELL-FUNCTIONING INTERNATIONAL MONETARY SYSTEM (IMS) — Overview - IMS has proved resilient to the crisis but shows tensions: widening global imbalances, volatile capital flows and exchange rate movements, and massive reserve accumulation. - Priority: promote a better functioning and more stable IMS through combined analysis and strong multilateral policy instruments. - "Strengthening the International Monetary System: Taking Stock" to be formally discussed in April to evaluate progress and identify further work areas. ### II. IMS — Global adjustment, capital flows, and reserve adequacy - Global adjustment: - WEO discussion will address requirements for global rebalancing. - "The Changing Patterns of Global Trade" to be discussed informally in March to analyze impact of relative price changes on trade flows and external rebalancing. - Capital flows: - "The Fund’s Role Regarding Cross-border Capital Flows" will discuss a multilateral framework for analyzing and dealing with cross-border capital flows and assess the adequacy of the Fund’s legal framework to address capital account issues. - "Cross-cutting Themes from Recent Country Experience with Capital Flows" will evaluate drivers behind current surge of inflows, domestic economic consequences, and effectiveness of policy responses. - Follow-up on Financial Interconnectedness work to advance understanding of global intermediation of capital and implications for surveillance. - Reserve adequacy: - "Reserve Adequacy Metrics" will assess approaches to official reserve adequacy, benefits and costs of precautionary reserve holdings, and aim to provide guidance on adequacy metrics based on country-specific characteristics. - This work to be discussed informally in December with Board input fed into a formal paper in February. ### II. IMS — Global financial safety net and surveillance - Global financial safety net: - Assessment of scope for enhancing international capacity to cope with systemic shocks. - Informal Board session in January: "Understanding Emerging Market Linkages: Implications for the Design of Global Financial Safety Nets." - Formal Board discussion in late March: "Role of Global Financial Safety Nets in Dealing with Systemic Crises" to examine incidence of systemic crises, international/regional/national responses, residual gaps, and options to fill them. - A Concept Note to lay out main themes for the upcoming Review of Conditionality will be discussed informally early next year. - Strong surveillance: - Strengthening countries’ incentives to pursue stability-oriented policies is key; Fund surveillance is essential. - Preparation begun for the Triennial Surveillance Review and Review of the 2007 Decision on Bilateral Surveillance, planned for Fall 2011. - A Concept Note outlining objectives and approach to these reviews to be discussed informally in March. - Formal Board discussion of "The Obligation of Members to Consult with the Fund under Article IV" planned for February to clarify legal framework and review options to address excessive delays in Article IV consultations. - Role of the SDR: - Following the Review of the Method of Valuation of the SDR in mid-November, the Board will discuss in January "Enhancing International Monetary Stability–A Greater Role for the SDR?" to examine the case for enhancing the SDR as a reserve asset and unit of account. - In-depth work on SDR valuation, including criteria for selecting currencies in the SDR basket, planned next year to enhance the SDR’s role as a reserve asset and its potential to improve IMS functioning. ### III. BUILDING A STRONGER GLOBAL FINANCIAL ARCHITECTURE — Regulatory reforms - Build on the Basel agreement to strengthen quality and quantity of bank buffers; further action needed particularly on: - Macro-prudential surveillance: - Spring 2011 GFSR will focus on post-crisis regulatory and macro-prudential reform policy, including implications of quantitative easing on financial stability, implications of new prudential requirements for systemic liquidity risk, and policy priorities for reforming housing finance. - Formal Board meeting planned for April on "Macro-prudential Policy—Towards a Framework" to review international progress. - Crisis management and resolution: - Organizational structure of cross-border groups and implications for financial stability to be discussed informally in December. - Challenges with “too-important-to-fail” institutions to be discussed in January (focusing on contingent capital) and in March. - Informal Board session planned for early-February to review intervention measures and tools used during the recent crisis and compare efficacy. - Standard assessment: - Review of the Standards and Codes Initiative for formal Board discussion in March to discuss experiences and, in cooperation with a parallel FSB review, assess need for modifications. - Experience with Anti-money Laundering and Combating the Financing of Terrorism program to be reviewed in March. ### III. BUILDING A STRONGER GLOBAL FINANCIAL ARCHITECTURE — Data gaps - IMF-FSB progress report on data gaps has guided work on assessing need for additional data. - Formal Board discussion in February will include staff’s proposal for possible refinements to the Special Data Dissemination Standard (SDDS). - Shortly after the Spring Meetings, a formal Board meeting will focus on design and implementation of "The Systemically Important Global Financial Institutions Data Template" and update other IMF/FSB secretariat work on the data gaps initiative requested by the G-20. ### IV. SUPPORTING LOW-INCOME COUNTRIES (LICs) — Analysis and policy work - Analysis: - Informal Board session planned in February on "New Growth Drivers for Low-Income Countries: the Role of BRICs" to highlight opportunities and challenges from the growing role of the BRICs in LICs’ development. - "A Framework for a Vulnerability Exercise for Low Income Countries" to be presented informally in early March. - Work on "Managing Volatility in Low-Income Countries: the Role of Contingent Financial Instruments" to begin with an informal Board session planned after the Spring Meetings. - Policies: - Staff will seek Board guidance on "The Future of the HIPC Initiative" (now substantially completed) in an informal Board session in February. - In February, review of the Fund’s Engagement with Countries in Fragile Situations to consider tailoring engagement, including technical assistance and revamped LIC facilities. ### V. CONTINUING WORK OF THE FUND — Highlights and institutional agenda - Proposed quota increase under quota reform will substantially strengthen the Fund’s capacity to assist members in crisis prevention and resolution. - Recurrent and upcoming Executive Board items: - Discussions pertaining to human resources, Fund finances, and risk management. - December discussion on expanding the Fund’s investment mandate (as part of the new income model) and a series of papers on Fund capital projects. - Consideration of disposition of profits from gold sales once completed, and review of the NAB in light of the quota increase. - Independent Evaluation Office (IEO) schedule: - IEO expects to submit evaluations of "IMF Performance in the Run-up to the Current Financial and Economic Crisis" and "Research at the IMF" in December, with follow-up Board discussions in January and February, respectively. - IEO reviews for next year relate to reserve adequacy and the role of the Fund as confidential advisor. ### Medium-term budget — priorities and process - Priority: design a medium-term budget that matches the level of spending with the Fund’s level of activity. - Ensure existing resources are well utilized. - Assess whether the scope of work requires an increase in resources in the steady state. - Executive Directors will have several opportunities to discuss these issues between January and the end of the budget year. ### Fall work program listing — policy items to be taken up by the Executive Board before the 2011 Spring Meetings (by section headings) - Departmental listing format: Dept. | Title of Paper | Description | Proposed Meeting Format (FD) - I Global Economy: A Balanced and Sustainable Recovery - FAD — Macrofiscal Implications of Health Care Reform in Advanced and Emerging Economies - Discusses policy changes required to support fiscal consolidation and draw on country experience. - Proposed Meeting Format: Informal Board Session - MCM/RES WEMD — Provides quarterly update on world economic and market developments. - Proposed Meeting Format: Informal Board Session - MCM — Global Financial Stability Report (GFSR) - Analytical chapters of GFSR will focus on two to three policy-relevant issues within the broader regulatory reform agenda, with particular attention to the macro-prudential area. - Proposed Meeting Format: Formal Board Meeting - RES — World Economic Outlook - Spring WEO - Proposed Meeting Format: Formal Board Meeting - FAD/MCM/RES/SPR — Results of the Early Warning Exercise - Proposed Meeting Format: Informal Board Session - II International Monetary System - LEG/SPR — The Fund’s Role regarding Cross-border Capital Flows. - Discusses the case for a multilateral framework for analyzing and dealing with cross-border capital flows and will suggest functions that the Fund could usefully perform in such a framework. - Proposed Meeting Format: Formal Board Meeting - MCM/RES/SPR — Reserve Adequacy Metrics - Discusses different approaches to reserve adequacy, benefits and costs of reserve holdings from a precautionary perspective, and new analytic work by staff. - Proposed Meeting Format: Informal Board Session - SPR — Understanding Emerging Market Linkages: Implications for the Design of Global Financial Safety Nets. - Examines financial linkages to and from emerging markets by tracing cross country balance sheet exposures and their determinants. It highlights the role of common creditor channels for the transmission of shocks. - Proposed Meeting Format: Informal Board Session - SPR — Concept note for the 2011 Review of Conditionality - Sets out the main themes for the upcoming Review of Conditionality. - Proposed Meeting Format: Informal Board Session - SPR — Enhancing International Monetary Stability–A Greater Role for the SDR? - Examines options to expand the supply of reserve assets and enhance the role of the SDR as an alternative reserve asset and unit of account. - Proposed Meeting Format: Formal Board Meeting - LEG/SPR — The Obligation of Members to Consult with the Fund under Article IV. - Clarifies the legal framework governing members’ obligations to consult with the Fund under Article IV, and options to address excessive delays in consultations. - Proposed Meeting Format: Formal Board Meeting - SPR — Reserve Adequacy Metrics. - Provides guidance on appropriate use of adequacy metrics based on country characteristics. - Proposed Meeting Format: Formal Board Meeting - SPR — Cross-cutting Themes from Recent Country Experience with Capital Flows. - Offers detailed examination of the experience of selected emerging markets with the current surge of capital flows, focusing on the main drivers, domestic economic consequences, and the nature and effectiveness of policy responses. - Proposed Meeting Format: Formal Board Meeting - SPR — Triennial Surveillance Review (TSR) and Review of 2007 Decision on Bilateral Surveillance – Concept Note. - Proposed Meeting Format: Informal Board Session - SPR — The Changing Patterns of Global Trade. - Examines the evolution of global trade patterns and structures to analyze the potential impact of changes in relative prices on international trade flows, and consequently on external rebalancing. - Proposed Meeting Format: Informal Board Session - SPR — Role of Global Financial Safety Nets in Dealing with Systemic Crises. - Broadly assesses (i) the incidence and nature of systemic crises, (ii) the range of international, regional and national responses, and (iii) any residual gaps in the global financial safety net to deal with systemic shocks. - Proposed Meeting Format: Formal Board Meeting - SPR — Strengthening the International Monetary System: Taking Stock. - Takes stock of progress to date in the work on strengthening international monetary stability across the range of work streams involved, including capital flows, international reserves, and global imbalances, and associated implications. - Proposed Meeting Format: Formal Board Meeting - III Global Financial Architecture - MCM — Organizational Structure of Cross-Border Groups: One Size Does Not Fit All - Focuses on the recent debate on the extent to which organizational structure of cross-border banking groups matters for financial stability and the pros and cons of various options. - Proposed Meeting Format: Informal Board Session - MCM — Contingent Capital and Bail-in Instruments: Are They Part of the Solution to the “Too-Important-to-Fail” Problem - Discusses recent proposals to address the too-important-to-fail problem by requiring that institutions issue contingent capital and similar instruments. - Proposed Meeting Format: Informal Board Session - MCM — Crisis Management and Resolution - Examines the intervention measures and tools used in the recent crisis and compares and contrasts their efficacy, including against the experience of previous crises. - Proposed Meeting Format: Informal Board Session - IV Low Income Countries - SPR — New Growth Drivers for Low-Income Countries: the Role of BRICs. - Highlights how LICs can take advantage of the opportunities and deal with the challenges arising from the growing role of the BRICs in LICs’ economic development—through trade, FDI, aid, spillovers, and the potential impact of global rebalancing. - Proposed Meeting Format: Informal Board Session - FAD — Revenue Mobilization in Developing Countries - Reviews experience, key challenges, and good practice in strengthening revenue mobilization in developing countries, in terms of both policy design and effective revenue administration. - Proposed Meeting Format: Formal Board Meeting - SPR — Future of the HIPC Initiative. - Given its near completion, discusses possible future options for the Initiative. A subsequent paper could explore these options further (most likely the 2011 HIPC implementation report). - Proposed Meeting Format: Informal Board Session - SPR — Review of the Fund’s Engagement with Countries in Fragile Situations. - Considers how the Fund’s engagement should be tailored to meet the unique challenges of countries in fragile situations, including through technical assistance and the revamped LIC facilities. - Proposed Meeting Format: Formal Board Meeting - FAD/RES/SPR — Towards a Framework for a Vulnerability Exercise for Low-Income Countries (LICs). - Makes the case for, and describes key elements of a forward-looking framework that identifies emerging risks and vulnerabilities for LICs from changes in the external environment. - Proposed Meeting Format: Informal Board Session - V Continued Work of the Fund - FIN — Asset Allocation under a Broadened Investment Mandate: Prelimenary Considerations - Presents initial considerations on broadening the Fund's Investment Mandate under the New Income Model. - Proposed Meeting Format: Formal Board Meeting - HRD — U.S. Healthcare Reform and the Medical Benefits Plan - Proposes three changes in MBP coverage to align the Fund with its competitors in light of recently adopted U.S. healthcare legislation. - Proposed Meeting Format: Formal Board Meeting - HRD — Staff Retirement Plan Reform Amendments and Actuarial Assumption Changes - Presents amendments to the Plan, including the SRP reforms approved in April 2010, recommendation for new grossing-up formulas, and additional technical plan updates. Seeks approval for changes in actuarial assumptions. - Proposed Meeting Format: Board Committee - OBP/TGS — HQ1 Renewal Project—Draft Proposals for the Planning and Programming Phase - Recommends options for renewing HQ1. - Proposed Meeting Format: Board Committee - HRD — Medical Benefits Plan-Integration of Medicare Part B and U.S. Healthcare Reform and the Medical Benefits Plan - Discusses issues affecting the financial position of the MBP arising from retiree participation in national health care plans and a recommendation to increase participation. - Proposed Meeting Format: Formal Board Meeting - HRD/OBP — Salary Adjustments and the Budget - Presents the report of the Working Group on Salary Adjustments & the Budget to the Committee on the Budget. - Proposed Meeting Format: Board Committee - OIA — Control and Audit Related Matters - Reports on internal audit related activity in the Fund. - Proposed Meeting Format: Informal Board Session - OBP — Initial Contours of the FY2012-FY2014 Medium-Term Budget - Presents preliminary proposals on the outlines of the new FY 12-14 medium-term budget, including budget envelope and budgeting framework going forward. - Proposed Meeting Format: Board Committee - FIN — Report of the External Audit Committee to the Executive Board - Discusses EAC’s report on its visit to the Fund to review the FY 2011 audit plan. - Proposed Meeting Format: Informal Board Session - SPR/TGS — IT Strategic Directions - Presents updated and new business priorities for the IT Capital Program including: (i) Funding and Lending; (ii) Surveillance; (iii) Economic Data and Metadata; (iv) Capacity Building; (v) Communication and Outreach; and (vi) Planning and Budget. - Proposed Meeting Format: Board Committee - FIN/OBP — The FY 2012-2014 Consolidated Medium-Term Income and Expenditure Framework - Discusses the income framework and overall proposed budget envelope for the new medium-term budget. - Proposed Meeting Format: Board Committee - IEO — IMF Performance in the Run-up to the Current Financial and Economic Crisis. - Assesses whether the IMF could have done better in anticipating and warning about the crisis; it identifies impediments that might have hindered the IMF's effectiveness and draws lessons for the future. - Proposed Meeting Format: Formal Board Meeting - IEO — Research at the IMF - This evaluation focuses on the relevance and utilization of IMF Research, particularly by member countries, and the quality of that research. - Proposed Meeting Format: Formal Board Meeting - FIN/OBP/TGS — HQ1 Renewal Project -- Proposed decision on major building project - Provides a follow-up meeting on HQ1 Renewal. - Proposed Meeting Format: Board Committee - HRD — Staff Compensation - Presents the results of the indexation formula used to determine the May 1, 2011 change in salaries. - Proposed Meeting Format: Formal Board Meeting *Source: IMF content unit _112210 - 1. Persistent challenges. The multi-speed nature of the global economic recovery is* ### 1. Persistent challenges. The multi-speed nature of the global economic recovery is ### _112210 - 1. Persistent challenges. The multi-speed nature of the global economic recovery is ### Persistent challenges and immediate risks - The multi-speed nature of the global economic recovery is testing the system, with strains appearing as large capital inflows to many emerging market countries and exchange rate pressures. - Slow employment growth, high indebtedness, and remaining financial sector fragilities in some countries could derail a fragile recovery. - Only cooperative approaches will succeed in relieving tensions and building a strong and sustainable recovery, based on a more balanced pattern of global growth. ### Quotas and governance breakthrough - Agreement reached on a historical reform of the IMF intended to facilitate needed global cooperation. - Members encouraged to begin work toward ensuring these reforms can take effect by the IMF-World Bank Annual Meetings in October 2012. ### Priorities for IMF work going forward - Reforms over the past two years have better positioned the Fund to help members meet 21st century challenges. - Focus areas going forward: - Balanced and sustainable growth. - A well-functioning international monetary system. - A robust global financial architecture. - Higher growth and stability in low-income countries. ### Medium-term budget and work practices - Demands on the IMF are large and available resources must be commensurate to the tasks ahead; forthcoming discussions on the Medium-term Budget will assess the appropriate budgetary envelope. - Need for a focused agenda and efficient practices: - Executive Board Working Group on Committees has paved the way for important changes in the workings of the Board. - Increased use of lapse-of-time procedures and better prioritization and timing of policy items to focus on strategic country and policy issues while maintaining adaptability. - Staff reduced the number of policy and country surveillance items in peak periods to even out workload; staff is identifying additional lapse-of-time items according to new criteria. - Departments have identified essential items that will, to the extent possible, not be moved. ### I. BALANCED AND SUSTAINABLE GROWTH — Global spillovers and coordination - Inaugural Spillover Reports for China, Euro Area, Japan, United Kingdom, and the United States to coincide with relevant Article IV discussions in July 2011 to analyze domestic policies’ impact beyond borders. - This work will contribute to broader multilateral surveillance and support the G-20 Mutual Assessment Process (MAP) by analyzing joint adequacy of G-20 policies to promote global rebalancing and suggesting policy adjustments. - Following the Seoul Summit, staff will provide further analysis and assessment of G-20 members’ policy progress toward the shared objectives of the G-20 MAP framework. ### I. BALANCED AND SUSTAINABLE GROWTH — Global analysis and Board engagements - Key global publications and meetings: - Spring World Economic Outlook (WEO) and Global Financial Stability Report (GFSR) will be examined, with a joint statement highlighting linkages between real economy and financial sector developments. - The Fiscal Monitor will examine cross-country experience with implementing large fiscal adjustments. - The WEO and GFSR will be discussed on the same day in late March 2011. - WEO analytical chapters will investigate commodity price developments and implications for medium-term growth prospects. - Board will be briefed informally on systemic vulnerabilities identified in the FSB/IMF Early Warning Exercise just ahead of the Spring Meetings. - Fiscal sustainability focus: - Informal Board discussions on Macrofiscal Implications of Health Care Reform in Advanced and Emerging Economies scheduled for January. - Formal discussion on Revenue Mobilization in Developing Countries scheduled for February. - After Spring Meetings, Board will discuss Crisis Experience and Lessons for Managing Sovereign Debt and Debt Markets, examining implications of the post-crisis rise in public debt on perceptions of sovereign risk, debt management policies, and financial stability. - Work will begin on Improving Further the Debt Sustainability Analysis for discussion after the Spring Meetings. ### II. A WELL-FUNCTIONING INTERNATIONAL MONETARY SYSTEM (IMS) — Overview - IMS has proved resilient to the crisis but shows tensions: widening global imbalances, volatile capital flows and exchange rate movements, and massive reserve accumulation. - Priority: promote a better functioning and more stable IMS through combined analysis and strong multilateral policy instruments. - "Strengthening the International Monetary System: Taking Stock" to be formally discussed in April to evaluate progress and identify further work areas. ### II. IMS — Global adjustment, capital flows, and reserve adequacy - Global adjustment: - WEO discussion will address requirements for global rebalancing. - "The Changing Patterns of Global Trade" to be discussed informally in March to analyze impact of relative price changes on trade flows and external rebalancing. - Capital flows: - "The Fund’s Role Regarding Cross-border Capital Flows" will discuss a multilateral framework for analyzing and dealing with cross-border capital flows and assess the adequacy of the Fund’s legal framework to address capital account issues. - "Cross-cutting Themes from Recent Country Experience with Capital Flows" will evaluate drivers behind current surge of inflows, domestic economic consequences, and effectiveness of policy responses. - Follow-up on Financial Interconnectedness work to advance understanding of global intermediation of capital and implications for surveillance. - Reserve adequacy: - "Reserve Adequacy Metrics" will assess approaches to official reserve adequacy, benefits and costs of precautionary reserve holdings, and aim to provide guidance on adequacy metrics based on country-specific characteristics. - This work to be discussed informally in December with Board input fed into a formal paper in February. ### II. IMS — Global financial safety net and surveillance - Global financial safety net: - Assessment of scope for enhancing international capacity to cope with systemic shocks. - Informal Board session in January: "Understanding Emerging Market Linkages: Implications for the Design of Global Financial Safety Nets." - Formal Board discussion in late March: "Role of Global Financial Safety Nets in Dealing with Systemic Crises" to examine incidence of systemic crises, international/regional/national responses, residual gaps, and options to fill them. - A Concept Note to lay out main themes for the upcoming Review of Conditionality will be discussed informally early next year. - Strong surveillance: - Strengthening countries’ incentives to pursue stability-oriented policies is key; Fund surveillance is essential. - Preparation begun for the Triennial Surveillance Review and Review of the 2007 Decision on Bilateral Surveillance, planned for Fall 2011. - A Concept Note outlining objectives and approach to these reviews to be discussed informally in March. - Formal Board discussion of "The Obligation of Members to Consult with the Fund under Article IV" planned for February to clarify legal framework and review options to address excessive delays in Article IV consultations. - Role of the SDR: - Following the Review of the Method of Valuation of the SDR in mid-November, the Board will discuss in January "Enhancing International Monetary Stability–A Greater Role for the SDR?" to examine the case for enhancing the SDR as a reserve asset and unit of account. - In-depth work on SDR valuation, including criteria for selecting currencies in the SDR basket, planned next year to enhance the SDR’s role as a reserve asset and its potential to improve IMS functioning. ### III. BUILDING A STRONGER GLOBAL FINANCIAL ARCHITECTURE — Regulatory reforms - Build on the Basel agreement to strengthen quality and quantity of bank buffers; further action needed particularly on: - Macro-prudential surveillance: - Spring 2011 GFSR will focus on post-crisis regulatory and macro-prudential reform policy, including implications of quantitative easing on financial stability, implications of new prudential requirements for systemic liquidity risk, and policy priorities for reforming housing finance. - Formal Board meeting planned for April on "Macro-prudential Policy—Towards a Framework" to review international progress. - Crisis management and resolution: - Organizational structure of cross-border groups and implications for financial stability to be discussed informally in December. - Challenges with “too-important-to-fail” institutions to be discussed in January (focusing on contingent capital) and in March. - Informal Board session planned for early-February to review intervention measures and tools used during the recent crisis and compare efficacy. - Standard assessment: - Review of the Standards and Codes Initiative for formal Board discussion in March to discuss experiences and, in cooperation with a parallel FSB review, assess need for modifications. - Experience with Anti-money Laundering and Combating the Financing of Terrorism program to be reviewed in March. ### III. BUILDING A STRONGER GLOBAL FINANCIAL ARCHITECTURE — Data gaps - IMF-FSB progress report on data gaps has guided work on assessing need for additional data. - Formal Board discussion in February will include staff’s proposal for possible refinements to the Special Data Dissemination Standard (SDDS). - Shortly after the Spring Meetings, a formal Board meeting will focus on design and implementation of "The Systemically Important Global Financial Institutions Data Template" and update other IMF/FSB secretariat work on the data gaps initiative requested by the G-20. ### IV. SUPPORTING LOW-INCOME COUNTRIES (LICs) — Analysis and policy work - Analysis: - Informal Board session planned in February on "New Growth Drivers for Low-Income Countries: the Role of BRICs" to highlight opportunities and challenges from the growing role of the BRICs in LICs’ development. - "A Framework for a Vulnerability Exercise for Low Income Countries" to be presented informally in early March. - Work on "Managing Volatility in Low-Income Countries: the Role of Contingent Financial Instruments" to begin with an informal Board session planned after the Spring Meetings. - Policies: - Staff will seek Board guidance on "The Future of the HIPC Initiative" (now substantially completed) in an informal Board session in February. - In February, review of the Fund’s Engagement with Countries in Fragile Situations to consider tailoring engagement, including technical assistance and revamped LIC facilities. ### V. CONTINUING WORK OF THE FUND — Highlights and institutional agenda - Proposed quota increase under quota reform will substantially strengthen the Fund’s capacity to assist members in crisis prevention and resolution. - Recurrent and upcoming Executive Board items: - Discussions pertaining to human resources, Fund finances, and risk management. - December discussion on expanding the Fund’s investment mandate (as part of the new income model) and a series of papers on Fund capital projects. - Consideration of disposition of profits from gold sales once completed, and review of the NAB in light of the quota increase. - Independent Evaluation Office (IEO) schedule: - IEO expects to submit evaluations of "IMF Performance in the Run-up to the Current Financial and Economic Crisis" and "Research at the IMF" in December, with follow-up Board discussions in January and February, respectively. - IEO reviews for next year relate to reserve adequacy and the role of the Fund as confidential advisor. *Source: IMF content unit _112210 - 1. Persistent challenges. The multi-speed nature of the global economic recovery is* ### 19. Medium-term budget. As is clear from what precedes, our agenda will remain quite ### 19. Medium-term budget. As is clear from what precedes, our agenda will remain quite full for the foreseeable future. ### Medium-term budget — priorities and process - Priority: design a medium-term budget that matches the level of spending with the Fund’s level of activity. - Ensure existing resources are well utilized. - Assess whether the scope of work requires an increase in resources in the steady state. - Executive Directors will have several opportunities to discuss these issues between January and the end of the budget year. ### Fall work program listing — policy items to be taken up by the Executive Board before the 2011 Spring Meetings (by section headings) - Departmental listing format: Dept. | Title of Paper | Description | Proposed Meeting Format (FD) - I Global Economy: A Balanced and Sustainable Recovery - FAD — Macrofiscal Implications of Health Care Reform in Advanced and Emerging Economies - Discusses policy changes required to support fiscal consolidation and draw on country experience. - Proposed Meeting Format: Informal Board Session - MCM/RES WEMD — Provides quarterly update on world economic and market developments. - Proposed Meeting Format: Informal Board Session - MCM — Global Financial Stability Report (GFSR) - Analytical chapters of GFSR will focus on two to three policy-relevant issues within the broader regulatory reform agenda, with particular attention to the macro-prudential area. - Proposed Meeting Format: Formal Board Meeting - RES — World Economic Outlook - Spring WEO - Proposed Meeting Format: Formal Board Meeting - FAD/MCM/RES/SPR — Results of the Early Warning Exercise - Proposed Meeting Format: Informal Board Session - II International Monetary System - LEG/SPR — The Fund’s Role regarding Cross-border Capital Flows. - Discusses the case for a multilateral framework for analyzing and dealing with cross-border capital flows and will suggest functions that the Fund could usefully perform in such a framework. - Proposed Meeting Format: Formal Board Meeting - MCM/RES/SPR — Reserve Adequacy Metrics - Discusses different approaches to reserve adequacy, benefits and costs of reserve holdings from a precautionary perspective, and new analytic work by staff. - Proposed Meeting Format: Informal Board Session - SPR — Understanding Emerging Market Linkages: Implications for the Design of Global Financial Safety Nets. - Examines financial linkages to and from emerging markets by tracing cross country balance sheet exposures and their determinants. It highlights the role of common creditor channels for the transmission of shocks. - Proposed Meeting Format: Informal Board Session - SPR — Concept note for the 2011 Review of Conditionality - Sets out the main themes for the upcoming Review of Conditionality. - Proposed Meeting Format: Informal Board Session - SPR — Enhancing International Monetary Stability–A Greater Role for the SDR? - Examines options to expand the supply of reserve assets and enhance the role of the SDR as an alternative reserve asset and unit of account. - Proposed Meeting Format: Formal Board Meeting - LEG/SPR — The Obligation of Members to Consult with the Fund under Article IV. - Clarifies the legal framework governing members’ obligations to consult with the Fund under Article IV, and options to address excessive delays in consultations. - Proposed Meeting Format: Formal Board Meeting - SPR — Reserve Adequacy Metrics. - Provides guidance on appropriate use of adequacy metrics based on country characteristics. - Proposed Meeting Format: Formal Board Meeting - SPR — Cross-cutting Themes from Recent Country Experience with Capital Flows. - Offers detailed examination of the experience of selected emerging markets with the current surge of capital flows, focusing on the main drivers, domestic economic consequences, and the nature and effectiveness of policy responses. - Proposed Meeting Format: Formal Board Meeting - SPR — Triennial Surveillance Review (TSR) and Review of 2007 Decision on Bilateral Surveillance – Concept Note. - Proposed Meeting Format: Informal Board Session - SPR — The Changing Patterns of Global Trade. - Examines the evolution of global trade patterns and structures to analyze the potential impact of changes in relative prices on international trade flows, and consequently on external rebalancing. - Proposed Meeting Format: Informal Board Session - SPR — Role of Global Financial Safety Nets in Dealing with Systemic Crises. - Broadly assesses (i) the incidence and nature of systemic crises, (ii) the range of international, regional and national responses, and (iii) any residual gaps in the global financial safety net to deal with systemic shocks. - Proposed Meeting Format: Formal Board Meeting - SPR — Strengthening the International Monetary System: Taking Stock. - Takes stock of progress to date in the work on strengthening international monetary stability across the range of work streams involved, including capital flows, international reserves, and global imbalances, and associated implications. - Proposed Meeting Format: Formal Board Meeting - III Global Financial Architecture - MCM — Organizational Structure of Cross-Border Groups: One Size Does Not Fit All - Focuses on the recent debate on the extent to which organizational structure of cross-border banking groups matters for financial stability and the pros and cons of various options. - Proposed Meeting Format: Informal Board Session - MCM — Contingent Capital and Bail-in Instruments: Are They Part of the Solution to the “Too-Important-to-Fail” Problem - Discusses recent proposals to address the too-important-to-fail problem by requiring that institutions issue contingent capital and similar instruments. - Proposed Meeting Format: Informal Board Session - MCM — Crisis Management and Resolution - Examines the intervention measures and tools used in the recent crisis and compares and contrasts their efficacy, including against the experience of previous crises. - Proposed Meeting Format: Informal Board Session - IV Low Income Countries - SPR — New Growth Drivers for Low-Income Countries: the Role of BRICs. - Highlights how LICs can take advantage of the opportunities and deal with the challenges arising from the growing role of the BRICs in LICs’ economic development—through trade, FDI, aid, spillovers, and the potential impact of global rebalancing. - Proposed Meeting Format: Informal Board Session - FAD — Revenue Mobilization in Developing Countries - Reviews experience, key challenges, and good practice in strengthening revenue mobilization in developing countries, in terms of both policy design and effective revenue administration. - Proposed Meeting Format: Formal Board Meeting - SPR — Future of the HIPC Initiative. - Given its near completion, discusses possible future options for the Initiative. A subsequent paper could explore these options further (most likely the 2011 HIPC implementation report). - Proposed Meeting Format: Informal Board Session - SPR — Review of the Fund’s Engagement with Countries in Fragile Situations. - Considers how the Fund’s engagement should be tailored to meet the unique challenges of countries in fragile situations, including through technical assistance and the revamped LIC facilities. - Proposed Meeting Format: Formal Board Meeting - FAD/RES/SPR — Towards a Framework for a Vulnerability Exercise for Low-Income Countries (LICs). - Makes the case for, and describes key elements of a forward-looking framework that identifies emerging risks and vulnerabilities for LICs from changes in the external environment. - Proposed Meeting Format: Informal Board Session - V Continued Work of the Fund - FIN — Asset Allocation under a Broadened Investment Mandate: Prelimenary Considerations - Presents initial considerations on broadening the Fund's Investment Mandate under the New Income Model. - Proposed Meeting Format: Formal Board Meeting - HRD — U.S. Healthcare Reform and the Medical Benefits Plan - Proposes three changes in MBP coverage to align the Fund with its competitors in light of recently adopted U.S. healthcare legislation. - Proposed Meeting Format: Formal Board Meeting - HRD — Staff Retirement Plan Reform Amendments and Actuarial Assumption Changes - Presents amendments to the Plan, including the SRP reforms approved in April 2010, recommendation for new grossing-up formulas, and additional technical plan updates. Seeks approval for changes in actuarial assumptions. - Proposed Meeting Format: Board Committee - OBP/TGS — HQ1 Renewal Project—Draft Proposals for the Planning and Programming Phase - Recommends options for renewing HQ1. - Proposed Meeting Format: Board Committee - HRD — Medical Benefits Plan-Integration of Medicare Part B and U.S. Healthcare Reform and the Medical Benefits Plan - Discusses issues affecting the financial position of the MBP arising from retiree participation in national health care plans and a recommendation to increase participation. - Proposed Meeting Format: Formal Board Meeting - HRD/OBP — Salary Adjustments and the Budget - Presents the report of the Working Group on Salary Adjustments & the Budget to the Committee on the Budget. - Proposed Meeting Format: Board Committee - OIA — Control and Audit Related Matters - Reports on internal audit related activity in the Fund. - Proposed Meeting Format: Informal Board Session - OBP — Initial Contours of the FY2012-FY2014 Medium-Term Budget - Presents preliminary proposals on the outlines of the new FY 12-14 medium-term budget, including budget envelope and budgeting framework going forward. - Proposed Meeting Format: Board Committee - FIN — Report of the External Audit Committee to the Executive Board - Discusses EAC’s report on its visit to the Fund to review the FY 2011 audit plan. - Proposed Meeting Format: Informal Board Session - SPR/TGS — IT Strategic Directions - Presents updated and new business priorities for the IT Capital Program including: (i) Funding and Lending; (ii) Surveillance; (iii) Economic Data and Metadata; (iv) Capacity Building; (v) Communication and Outreach; and (vi) Planning and Budget. - Proposed Meeting Format: Board Committee - FIN/OBP — The FY 2012-2014 Consolidated Medium-Term Income and Expenditure Framework - Discusses the income framework and overall proposed budget envelope for the new medium-term budget. - Proposed Meeting Format: Board Committee - IEO — IMF Performance in the Run-up to the Current Financial and Economic Crisis. - Assesses whether the IMF could have done better in anticipating and warning about the crisis; it identifies impediments that might have hindered the IMF's effectiveness and draws lessons for the future. - Proposed Meeting Format: Formal Board Meeting - IEO — Research at the IMF - This evaluation focuses on the relevance and utilization of IMF Research, particularly by member countries, and the quality of that research. - Proposed Meeting Format: Formal Board Meeting - FIN/OBP/TGS — HQ1 Renewal Project -- Proposed decision on major building project - Provides a follow-up meeting on HQ1 Renewal. - Proposed Meeting Format: Board Committee - HRD — Staff Compensation - Presents the results of the indexation formula used to determine the May 1, 2011 change in salaries. - Proposed Meeting Format: Formal Board Meeting *Source: _112210 - 19. Medium-term budget. As is clear from what precedes, our agenda will remain quite* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2010/_112210.pdf_