Rethinking the IMF’s Mandate: Asking for Your Views

IMF Blog, March 15, 2010

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Publication date: March 15, 2010.
Context: The IMF is rethinking its role in the post-crisis world to better serve its 186 member countries and help them avoid another global recession, with implications for trade, jobs, and living standards.
Trigger: At the IMF-World Bank meetings in Istanbul in October 2009, the IMFC asked the IMF to rethink its mandate to ensure it can cover “the full range of macro and financial sector policies that bear on macroeconomic global stability.”
Process: Conclusions will be discussed at the upcoming Annual Meetings in Washington D.C.; a series of papers for discussion by the IMF’s Executive Board will be issued in the coming months. The first discussion paper was published on February 26.

Crisis prevention
- IMF surveillance currently covers both individual country policies and global developments, but the bulk of efforts have been at the country level.
- The Fund’s surveillance needs to adapt by giving more attention to the buildup of systemic risk, linkages, and spillovers across economies.
- Such analysis should be hardwired into the Fund’s standard surveillance procedures.
- The analysis of financial sector policies is highlighted as particularly important for being ahead of the curve in crises.
Crisis response
- The crisis demonstrated that IMF resources must be available with speed, coverage, and size far beyond previous assumptions.
- Far-reaching reforms were introduced during the crisis, but further steps are needed to deliver financing in a more flexible manner.
- The Fund should be able to handle systemic—as opposed to country-level—crises, with capacity to offer short-term swap lines like those provided by the U.S. Fed and other central banks at the start of this crisis.
Stability of reserves
- The crisis highlighted tension between high demand for global liquidity by emerging market economies and dependence on the stability of a few suppliers of liquidity.
- Strengthening the IMF’s ability to prevent and respond to crises could help reduce countries’ perceived need to accumulate vast reserves.
- The Fund may consider backing the use of a global reserve asset and other initiatives to reduce risk in the international monetary system.

The IMF has initiated a public consultation with stakeholders including governments, private sector, academia, think tanks, non-governmental and civil society organizations, and the wider public.
The consultation invites views on the three key areas: surveillance, financing, and the stability of the international monetary system.
Governance reforms (including redistribution of quotas “in line with fundamental changes in the relative size and role of countries, notably of dynamic emerging market countries”) are acknowledged as essential but are being handled on a separate track by the membership.

Consultation platform: Stakeholders can submit ideas and comments via an on-line consultation platform created for this purpose.
Consultation period: runs through May 15, 2010.
Documents available for comment: the overview note (released on February 22) and follow-up papers to be posted on imf.org in due course.
Use of inputs: Inputs from the consultation process will feed into the final report prepared for the Annual Meetings.
Publication of submissions: The IMF expects to make the comments and inputs received in this process available on the IMF website after May 15, 2010.

Invitation: The IMF welcomes ideas and comments from all stakeholders and looks forward to hearing views.

Source: IMF blog post “Rethinking the IMF’s Mandate: Asking for Your Views” (March 15, 2010).