## Transcript of the International Monetary and Financial Committee (IMFC) Press Briefing

_IMF News, April 12, 2014_

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**Canonical URL:** [Transcript of the International Monetary and Financial Committee (IMFC) Press Briefing](https://www.imf.org/en/news/articles/2015/09/28/04/54/tr041214b)

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## Bibliographic details
- Published: April 12, 2014

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### Key themes from opening remarks
- Need for a new balance in policies that meets the needs of the new phase in the economic recovery globally:
  - Greater focus on the medium term more than the short term.
  - Much greater focus on structural reforms, including:
    - Balance sheet repair in banking systems, including in Europe.
    - Improving labor market functioning to reduce extraordinarily high levels of youth unemployment.
    - Building up and strengthening institutions in emerging, developing, and advanced economies.
- Structural reforms should complement, not abruptly replace, macroeconomic support—especially monetary policy—while preparing economies for sustained growth.

### Financial stability and capital-flow risks
- Concerns highlighted:
  - Legacy risks from the last crisis and new financial risks, notably increased corporate leverage in some parts of the world not matched by improvements in investment.
  - Continued risk of volatility in capital flows to emerging market economies; this is expected to be a continuing challenge.
- Observations on global finance structure:
  - Larger capital flows with changed composition toward bond markets, mutual funds, and ETFs.
  - Increased retail investor participation leading to more herd-like behavior and accentuated "risk on/risk off" dynamics.
- Policy implication:
  - Emphasis on work from the Global Financial Stability Report and continued monitoring of changing capital-flow composition and volatility.

### Geopolitical risks and IMF operational responses
- Geopolitical tensions (explicit reference to Ukraine among other risks) were a distinct area of concern.
- IMF role:
  - Rapid engagement and stabilization where possible.
  - For Ukraine: staff agreement on necessary measures and financing needs; Ukraine is "gradually, I understand fast, taking the measures" required for prior actions; expectation that program could be concluded "at the end of April."

### IMF institutional reform (2010 Reforms) and governance
- Strong emphasis on completing the 2010 Reforms of the Fund:
  - Seen as critical for a safer, better world and for the Fund to provide critical public goods.
  - Calls for the United States to play its responsible role; confidence expressed that it will.
- If 2010 reforms are not completed:
  - Risk of disruptive change, weakening of multilateralism, and rise of regionalism and bilateralism.
  - Statement that it is "entirely possible that the United States is going to ratify the 2010 reforms in the course of the year."

### Growth agenda, rebalancing, and inclusiveness
- Strong endorsement of the Global Policy Agenda and focus on:
  - "Pursuit of growth" that is better and more inclusive.
  - Work on inequality from a fiscal point of view.
  - Rebalancing: examples given include rebalancing in the United States and China; remaining rebalancing needed in some emerging market economies (deficits) and Northern Europe (surpluses).
  - Climate change and environmental degradation recognized as macroeconomically important.
- Structural reforms, investment, and infrastructure:
  - Investment remains weak relative to where it should be across advanced and emerging economies.
  - Infrastructure investment has "huge potential" for sustainable growth but requires transparent, predictable regulation and a framework that gives confidence to private investors.

### Monetary policy, low inflation, and central-bank tools
- Low inflation is an issue across many advanced economies, not just the euro area.
- ECB context:
  - Reference to "12 percent unemployment rate in the euro area."
  - Encouragement that the ECB "has available, and will use in due course and if necessary, the appropriate tools to deal with it."
- Policy stances noted:
  - "Tapering" in the United States; continued accommodative policy in Europe and Japan; structural reforms broadly emphasized.

### Resilience, international safety nets, and capital-flow management
- Emphasis on strengthening domestic resilience:
  - Stable inflation, medium-term fiscal balance, and investment-friendly frameworks.
- Discussion of gaps in the international safety net:
  - Need for instruments providing quick liquidity to well-managed countries without conditionality to reduce ex ante reserve accumulation by developing countries.
  - Careful study required to avoid moral hazard.

### IMF operations, capacity building, and outreach
- Current operational scope highlighted by Managing Director Christine Lagarde:
  - Lending: "We lent under 33 different programs at the moment."
  - Technical assistance: provided to "150 members within the membership."
  - Regional engagement and capacity-building examples:
    - Fifth Regional Training Center opened in Accra, Ghana.
    - Upcoming conferences: "Africa Rising" in Maputo, Mozambique (at the end of May) and a conference in Amman, Jordan (early June) focused on growth and jobs in Arab countries.

### Country-specific notes and messaging
- Greece:
  - Acknowledgement of severe hardships, especially youth unemployment; cited figure "60 percent of the young people are unemployed."
  - Signs of improvement: "for the first time seeing positive growth," exports improving, ability to borrow from markets "at not extraordinary but very decent rates and oversubscribed."
  - Hope that returning confidence and structural reforms will lead to investment and job creation.
- MENA region:
  - IMF programs underway with Morocco, Tunisia, Jordan; negotiations with Yemen.
  - Technical assistance provided to countries including Egypt.
- Ghana and broader outreach:
  - Emphasis on partnership approach, technical assistance, changed approach from past "structural adjustment" models.

### Accountability, G20 growth target, and monitoring
- On the G20 target to raise growth by 2 percent in five years (characterized in discussion as implying 0.4 percent per year in a question):
  - IMF approach: scoring and assessment of contributions from G20 country plans before accounting for aggregate effects; currently in the "scoring phase."
  - No automatic mechanical incorporation of "0.4 percent per year" into WEO forecasts without delivery and renewed commitments.

### Discussion dynamics and forward agenda
- Recognition that past multilateral growth initiatives have often fizzled; participants noted differences this time:
  - Greater detail around the kind of growth sought (inclusive, sustainable, mindful of externalities).
  - Stronger engagement and willingness to be accountable.
- Emphasis on avoiding policy slippage in good times by strengthening medium-term fiscal planning and institutions to reduce likelihood and severity of future crises.

*Transcript of the International Monetary and Financial Committee (IMFC) Press Briefing (April 12, 2014) — International Monetary Fund*

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## References

- [Ghana and the IMF](http://www.imf.org/external/country/GHA/index.htm)
- [Greece and the IMF](http://www.imf.org/external/country/GRC/index.htm)
- [Japan and the IMF](http://www.imf.org/external/country/JPN/index.htm)
- [Ukraine and the IMF](http://www.imf.org/external/country/UKR/index.htm)
- [United States and the IMF](http://www.imf.org/external/country/USA/index.htm)
- [Conditionality](https://www.imf.org/en/about/factsheets/sheets/2023/imf-conditionality)
- [Technical Assistance -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-capacity-development)
- [Transcripts](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
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_Source: https://www.imf.org/en/news/articles/2015/09/28/04/54/tr041214b_