Press Release: IMF to Focus on Securing a Stronger Global Economy and Advancing Governance and Mandate Reforms

June 8, 2010

Press Release No. 10/233
June 8, 2010

The International Monetary Fund (IMF) will focus its activities for the period ahead on securing the recovery from the global financial crisis and making progress in its governance and mandate reforms, IMF Managing Director Dominique Strauss-Kahn said in presenting the IMF's work program for the upcoming period.

“Recent events clearly show that the global economy remains vulnerable, and that important work remains to be done to secure the recovery and prevent future crises,” Mr. Strauss-Kahn told the Executive Board during the discussion of the work program. “The IMF must adapt to new challenges and make sure that it has the right tools to assess and mitigate risks to global stability and, when crisis prevention efforts are not enough, the right instruments to restore confidence.”

Stronger Global Economy

In addition to the regular analysis of global economic and financial conditions in the World Economic Outlook and the Global Financial Stability Report, the work program envisages that the IMF will deepen its policy dialogue with member countries. To this end, the IMF will be refining its ability to identify vulnerabilities in individual countries early on, drawing lessons from the responses to the recent financial crisis, and examining issues relating to the long-term fiscal sustainability of countries. In addition, the IMF will continue to support the G-20 Mutual Assessment Process.

With regard to financial market regulatory architecture, the work program envisages that the Board will be discussing implications of financial regulatory initiatives across countries, as well as options for a fair and substantial financial sector contribution to cover the burden associated with government interventions to repair the banking system.

Low-income countries (LICs) will remain a priority for the Board in the period ahead. In this context, the Fund is expected to sketch a framework for analyzing how shocks translate into vulnerabilities in various sectors in LICs and publish a study on exit strategies and post-crisis policies for LICs.

Governance and Mandate Reforms

Substantial work remains to be done to complete the Fund’s quota review before January 2011, and the work program envisages discussion of various aspects of governance and quota reform during the summer. A status report will be issued ahead of the Annual Meetings in October 2010.

Boosting the quality and effectiveness of surveillance will remain central to the review of the Fund’s mandate. In this context, spillover reports, which will cover all five major economies (China, Euro Area, Japan, United Kingdom and United States), are planned for the next 18-24 months. The Board will consider various options to strengthen the Fund’s crisis prevention toolkit, including improvements to the Flexible Credit Line (FCL), and will continue to discuss options to promote the long-term stability and proper functioning of the international monetary system.

“This is a highly ambitious agenda and reaching consensus on many of the proposed reforms will present challenges. However, these reforms are essential to the legitimacy and effectiveness of the Fund and I am confident that these challenges will be met,” Mr. Strauss-Kahn concluded.


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