{
  "title": "Opening Address to the 2009 Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund",
  "publication": "IMF News, October 6, 2009",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sp100609",
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  "summary": "Projection: global economic activity will expand by about 3 percent in 2010, after contracting by 1 percent in 2009.",
  "authors": [
    "Dominique Strauss-Kahn Managing Director"
  ],
  "publishDate": "2009-10-06",
  "sections": [
    {
      "heading": "Global economic outlook and risks",
      "content": "- Projection: global economic activity will expand by about 3 percent in 2010, after contracting by 1 percent in 2009.\n- Recovery characterized as underway but fragile: \"the crisis is not over. The recovery will be sluggish, and private demand is not yet self-sustaining.\"\n- Key demand-side risks:\n  - Deleveraging expected to persist.\n  - Consumption remains tentative where household balance sheets are weak.\n  - Rising unemployment likely to continue in many countries through 2010.\n- Humanitarian and political stakes:\n  - Low-income countries: up to 90 million people may have been pushed into extreme poverty.\n  - Weak social safety nets could lead to social unrest, political instability, or war.\n- Policy caution: premature withdrawal of policy support could kill the recovery; credible exit strategies should be designed but not implemented too soon."
    },
    {
      "heading": "Financial sector repair and regulatory priorities",
      "content": "- Remaining needs to secure recovery:\n  - Fully recognize losses.\n  - Increase bank capital and repair bank balance sheets.\n  - Widen the regulatory perimeter.\n  - Boost capital and liquidity buffers.\n  - Pay greater attention to systemically important institutions.\n- Coordination successes cited during crisis:\n  - Central bank cooperation including coordinated interest cuts and swap lines.\n  - Fiscal policy coordination delivering a 2 percent of GDP global fiscal stimulus.\n  - Estimated contribution: \"a third of the growth gain from this stimulus came from this very act of coordination.\""
    },
    {
      "heading": "IMF actions and operational changes over the past year",
      "content": "- Emergency financing and access:\n  - Stepped up emergency financing dramatically, with commitments amounting to over twice as much as during the Asian crisis.\n  - Doubled access limits for all borrowers.\n- Liquidity and concessional support:\n  - Injected $283 billion of extra liquidity in Special Drawing Rights into the global economy.\n  - Scaled up concessional lending, up to $17 billion through 2014, including $8 billion in the next two years.\n  - Will lend at zero interest to low-income countries through the end of 2011.\n- New instruments and program design:\n  - Introduced a new Flexible Credit Line, granting rapid upfront financing in large amounts to countries with a proven track record, with no additional conditionality.\n  - Streamlined conditionality to focus only on core policy measures critical for macroeconomic stability and growth.\n  - Accommodated higher budget deficits in both concessional and non-concessional lending programs.\n  - Programs include special provisions for protecting the poorest and most vulnerable."
    },
    {
      "heading": "Reform agenda — \"the Istanbul decision\"",
      "content": "- Four key reform areas requested by the IMFC: mandate, financing role, multilateral surveillance, and governance.\n- Mandate:\n  - Propose reviewing the IMF mandate to encompass the whole range of macroeconomic and financial sector policies that affect global stability, beyond traditional focus on current accounts and currency movements.\n- Financing role:\n  - Build on the Flexible Credit Line and provide insurance to more countries to reduce incentives for excessive self-insurance (large reserves), which fosters global imbalances and hinders rebalancing from export-led to domestic demand.\n  - Assess whether enhancing financing instruments can address precautionary demand for reserves, given limited IMF resources relative to that demand.\n- Multilateral surveillance:\n  - IMF to help with G-20 mutual assessment of policies, representing a new kind of multilateral surveillance aligned with emphasis on macro-financial linkages and cross-country spillovers.\n  - New Early Warning Exercise, run jointly with the Financial Stability Board, to refine understanding of tail risks and vulnerabilities, including cross-border dimensions.\n- Governance:\n  - IMFC endorsed G-20 proposal to shift quota shares toward dynamic emerging markets and developing countries by at least five percent from over-represented to under-represented countries; this will be done by January 2011.\n  - Implementation gap: only 36 out of the needed 111 countries have passed legislation related to the 2008 quota and voice reform; countries urged to move ahead quickly."
    },
    {
      "heading": "Strategic message and call to action",
      "content": "- Historical lesson: international cooperation prevented a deeper crisis; momentum must continue to shape a post-crisis world that delivers sustainable broad-based growth, peace, and stability.\n- Institutional appeal: IMF must adapt to better serve its 186 member countries and remain effective and responsive to members' needs.\n- Closing emphasis: the current moment is a historic opportunity to reshape the global economy and realize the ideal that \"the brotherhood of man will have become more than a phrase.\"\n\nOpening Address to the 2009 Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund, October 6, 2009 — Dominique Strauss-Kahn\n\n---\n\n Content in this bundle\n\n- 100609apdf (PDF){rel=\"external\" type=\"application/pdf\"}\n- 100609jpdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- United States and the IMF\n- IMF Policy Advice -- A Factsheet\n- Speeches\n- Dominique Strauss-Kahn\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/sp100609"
    }
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    "Authors: Dominique Strauss-Kahn Managing Director",
    "Published: October 6, 2009",
    "Projection: global economic activity will expand by about 3 percent in 2010, after contracting by 1 percent in 2009.",
    "Recovery characterized as underway but fragile: \"the crisis is not over. The recovery will be sluggish, and private demand is not yet self-sustaining.\"",
    "Key demand-side risks:",
    "Humanitarian and political stakes:",
    "Policy caution: premature withdrawal of policy support could kill the recovery; credible exit strategies should be designed but not implemented too soon.",
    "Remaining needs to secure recovery:",
    "Coordination successes cited during crisis:",
    "Emergency financing and access:",
    "Liquidity and concessional support:",
    "New instruments and program design:",
    "Four key reform areas requested by the IMFC: mandate, financing role, multilateral surveillance, and governance.",
    "Mandate:",
    "Financing role:",
    "Multilateral surveillance:",
    "Governance:",
    "Historical lesson: international cooperation prevented a deeper crisis; momentum must continue to shape a post-crisis world that delivers sustainable broad-based growth, peace, and stability.",
    "Institutional appeal: IMF must adapt to better serve its 186 member countries and remain effective and responsive to members' needs.",
    "Closing emphasis: the current moment is a historic opportunity to reshape the global economy and realize the ideal that \"the brotherhood of man will have become more than a phrase.\"",
    "[100609apdf (PDF)](/-/media/websites/imf/imported/external/arabic/np/speeches/2009/100609apdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[100609jpdf (PDF)](/-/media/websites/imf/imported/external/japanese/np/speeches/2009/100609jpdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[United States and the IMF](http://www.imf.org/external/country/USA/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[Dominique Strauss-Kahn](https://www.imf.org/external/np/omd/bios/dsk.htm)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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