## Statement by the Managing Director on the Work Program of the Executive Board — Executive Board Meeting October 31, 2011

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### I. Immediate threats to global stability — Vigilance and Policy Advice
- Global context:
  - The global economy has entered a "dangerous new phase with severe downside risks."
  - The IMFC has called on the Fund to contribute to an orderly resolution of these tensions.
- Primary responsibilities:
  - Provide insightful analysis and policy advice to address fiscal-financial vulnerabilities and rekindle growth and job creation.
  - Fortify the global financial safety net.
  - Strengthen the international monetary system (IMS) through more effective surveillance and a clearer shared vision of the system’s key underpinnings.
- Surveillance and briefings:
  - Staff briefings of Executive Directors will be provided "as frequently as circumstances warrant."
  - Overview of risks and prospects to be provided in the WEO, GFSR, Fiscal Monitor, and Early Warning Exercise just before the April IMFC Meeting, and consolidated in a Consolidated Multilateral Surveillance Report to the IMFC.

- Fiscal consolidation and debt sustainability (policy focus and schedule):
  - Fiscal Monitor Update and the semi-annual update on the World Economic and Market Developments scheduled for January 2012.
  - Informal Board discussions planned early in the new year on:
    - "The Challenge of Pension Reform in Advanced and Emerging Countries."
    - "Fiscal Transparency, Risk and Accountability in the Post-Crisis Environment."
  - "Fiscal Policy for Employment Growth in Advanced and Emerging Economies" scheduled for Board discussion in early April.

- Threats to global financial stability and bank repair (analysis and workstreams):
  - Global Financial Stability Report (GFSR) will cover key issues.
  - Staff work includes "Stress Testing: Toolkit and Best Practices" focused on stress-testing banks, drawing on FSAP knowledge.
  - "Modalities for Cross-Border Bank Resolution" scheduled for informal discussion just after the Spring Meetings.
  - A paper on integrating macroprudential policy into monetary and prudential frameworks to be brought to the Board sometime after the Spring Meetings.

### I.B Global Financial Safety Net — Lending and Resources
- Lending toolkit reviews and timing:
  - "Review of the Flexible Credit Line and the Precautionary Credit Line" brought forward to end-November (from original 2012 date).
  - "The Fund’s Financing Role—GRA Reform Options" to accompany FCL/PCL review with concrete proposals for strengthening existing facilities.
  - "Review of Conditionality" scheduled for February; will cover programs approved from 2002 through September 2011.
  - "Crisis Programs Review" planned for April with a particular focus on recent programs in Europe.

- Resource adequacy and related reviews:
  - "Review of the Adequacy of Fund Resources" planned in the near future.
  - "Review of the Adequacy of the Fund’s Precautionary Balances" in March.
  - Formal Review of the New Arrangements to Borrow (NAB).
  - Members urged to speed acceptance of the 2010 quota increase.

### I.C Low-Income Countries (LICs) — Vulnerabilities, Surveillance, and Support
- Vulnerabilities and analytical work:
  - First full "vulnerability exercise" for LICs (VE-LIC), focused on global growth and commodity price shocks, to be discussed in November.
  - "The LIC Debt Sustainability Framework Revisited" (joint with World Bank) scheduled for Board discussion on 1/6/2012; will address indicative debt burden thresholds and risk rating of external debt distress and draw on earlier modernizing DSA work.
  - "Enhanced Financial Sector Surveillance in LICs: Shallow Markets and Macro Stability" scheduled in early February to discuss a new approach to financial sector surveillance in LICs.

- Financial support and programs:
  - "The HIPC Initiative and MDRI—Status of Implementation Report" to make proposals for the future of HIPC and present a ring-fencing exercise based on end-2010 data.
  - Review of Eligibility under the Poverty Reduction and Growth Trust (PRGT) to be discussed in a formal meeting in February.
  - "Follow-Up on the Use of Gold Profits" to be discussed later in the year.

### II. Long-term stability of the International Monetary System — Surveillance Apparatus
- Triennial Surveillance Review (TSR) and gaps identified:
  - Main gaps: analysis of cross-country spillovers, risk assessments, financial and external stability, and uneven traction with country authorities.
  - The upcoming final discussion of the TSR will take up an action plan to address these gaps.

- Planned surveillance-related items and timing:
  - "Strategic Plan for Financial Sector Surveillance" for discussion in March.
  - "Modernizing the Legal Framework of Surveillance" in April.
  - Informal Board discussion on enhanced methodologies for assessment of exchange rates and current account balances in April.
  - With each WEO cycle, the Fund will publish a multilaterally-consistent staff assessment of external balances, currencies, and policies.

- Interconnectedness work program (Board information papers and timing):
  - "Enhancing Surveillance: Interconnectedness and Clusters" (December).
  - "Trade Interconnectedness: Global Supply Chains" (March).
  - "Interconnectedness: Spillovers through Global Financial Centers" (June/July).

### II.B Structural Change — Capital Flows, SDRs, and Reserves
- Capital flows and related Board discussions:
  - "Multilateral Aspects of Policies Affecting Capital Flows" (November).
  - "Capital Account Liberalization and Managing Capital Outflows" (February).
  - These will lead up to a "Capital Flows Framework" paper to enhance global stability in early April.

- Reserve assets and related analysis:
  - "Criteria for Broadening the SDR Currency Basket" to be discussed soon.
  - A chapter in the Spring GFSR will examine implications of fewer "risk-free assets."
  - "Reserve Management: Lessons from Recent Crisis Episodes" to go to the Board for information in May.

### II.C Governance Reform — Legitimacy and Quota Reform
- Implementation and timetable:
  - Quarterly status reports to take stock of acceptance of the 2010 reform package, with emphasis on implementing agreed quota and governance reform by the 2012 Annual Meetings.
  - "Quota Formula Review: Initial Considerations" to be discussed at end-February, noting the commitment to complete the review by January 2013.
  - An informal discussion of the Fund’s diversity strategy is planned for mid-2012.

### III. Management of the Institution — Internal Operations and Board Practices
- Administrative and operational items (highlights and timing):
  - Reassessing the Fund’s Technical Assistance Strategy in November.
  - New Rule for Setting the Margin on the Basic Rate of Charge to be discussed in December.
  - "Broadening of the Fund’s Investment Mandate" in February.
  - Directors will meet members of the External Panel on the Fund’s Risk Management Framework to discuss their Report early next year.
  - Budget and Compensation Review discussions to be held as usual.

- Board practices and calendar management:
  - Agreement on new Board practices in November last year; this Statement includes a list of "anchor" items (Box 1) intended not to be altered.
  - Departments requested to commit to fix Board dates one-month ahead to increase predictability.
  - An interdepartmental task force worked to even out country items over the coming year, with focus on alleviating the Board’s workload next summer.
  - A review of the new Board practices is scheduled for later in the year.

- Box 1 anchor policy and administrative items (selected items and dates as shown):
  - The FY2013-2015 Medium-Term Budget (no date shown in Box 1).
  - "Multilateral Aspects of Policies Affecting Capital Flows" — listed with departments MCM/SPR/RES/LEG.
  - "Review of the Adequacy of the Fund’s Precautionary Balances" — SPR/LEG.
  - "Modernizing the Legal Framework for Surveillance" — 4/6/2012.
  - "Capital Flows Framework Paper" — listed.
  - "Strategic Plan for Financial Sector Surveillance" — listed.
  - "Capital Account Liberalization and Managing Capital Outflows" — 2/15/2012.
  - "Review of the Flexible Credit Line (FCL) and Precautionary Credit Line (PCL)" — 11/21/2011.
  - Additional scheduling references in the Statement include: 11/21/2011; 3/9/2012; 4/6/2012; 2/15/2012; 1/6/2012; 2/6/2012; 3/16/2012; 3/30/2012; 3/30/2012; 4/2/2012; 4/9/2012; 4/25/2012.

- Board workload overview (Table 1 and charts — planning signals):
  - The Statement emphasizes prioritization: only items requiring Board decision or views are proposed for the Board’s agenda; more items will be considered on a "lapse of time" (LOT) basis and "for information."
  - Departments were asked to prioritize essential items and to collaborate to focus the Board on core tasks during this difficult global economic period.

*Source: Statement by the Managing Director on the Work Program of the Executive Board, Executive Board Meeting, October 31, 2011.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_103111.pdf_