{ "title": "Transcript of a Press Briefing on the Final Report by the Committee to Study Sustainable Long-term Financing of the IMF (Crockett Report)", "publication": "IMF News, January 31, 2007", "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/54/tr070131", "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/54/tr070131", "overlayPath": "/en/news/articles/2015/09/28/04/54/tr070131/index.md", "summary": "Event: Press briefing on the report on sustainable long-term financing of the IMF prepared by an Eminent Persons Committee chaired by Andrew Crockett.", "publishDate": "2007-01-31", "sections": [ { "heading": "Background and context", "content": "- Event: Press briefing on the report on sustainable long-term financing of the IMF prepared by an Eminent Persons Committee chaired by Andrew Crockett.\n- Date and location: January 31, 2007, Washington DC.\n- Report authorship: Committee chaired by Andrew Crockett; members included Mohamed El-Erian, Alan Greenspan, Tito Mboweni, Guillermo Ortiz, Hamad Al-Sayari, Jean-Claude Trichet, and Zhou Xiaochuan.\n- Managing Director present: Rodrigo de Rato.\n- Purpose: Identify an income model aligned with members’ interests and reflecting the range of public goods the IMF provides; the Committee’s mandate focused on income (not expenditure)." }, { "heading": "Key assessments of the existing income model", "content": "- Duration in practice: \"the actual income model of the institution has been in practice for 60 years.\"\n- Core deficiencies identified:\n - Concentration on a single income source: the intermediation margin between the rate at which the Fund lends and the rate at which it remunerates creditors.\n - Volatility: high lending periods generate large resources; low lending periods generate little income despite ongoing non-lending missions.\n - Perverse countercyclicality: when the world economy is weak and the Fund must lend in crisis situations, resources are relatively plentiful; when the Fund helps stabilize the global economy, it can be short of resources.\n- Functional decomposition of IMF activities used to evaluate income sources:\n - Financial intermediation (lending to countries in difficulties).\n - Provision of international public goods (surveillance, statistics, research).\n - Bilateral services (capacity building and technical assistance)." }, { "heading": "Committee recommendations — general principles", "content": "- Match multiple IMF functions with separate income sources; avoid concentration on a single source.\n- Intermediation margin should: cover costs as a financial intermediary and accumulation of reserves against the possibility of arrears — not be used as the primary income source for public-good activities.\n- View proposals as a package; interdependence among elements implies not every item must be adopted exactly as proposed but the package should be considered holistically.\n- Although the Fund is in a strong financial position currently, begin process \"straight away\" to develop a new income model.\n- If future lending generates surpluses, consider returning surpluses to members rather than accumulating reserves or funding uncosted activities." }, { "heading": "Gold-related proposal and parameters", "content": "- Recommended sale amount: \"about 400 metric tons.\"\n- Rationale for 400 metric tons: corresponds to the gold that was sold and repurchased in an off-market transaction about six or seven years ago and which is legally in a slightly different category.\n- Proceeds estimate at assumed price:\n - \"about 4.4 billion SDRs, or 6.6 billion dollars, at a price of 500 dollars an ounce.\"\n- Conditions and safeguards on gold sale:\n - Limit sale to the 400 tons mentioned, \"without envisaging any additional sales.\"\n - Sale should take place within the existing Central Bank Gold Agreement and be accommodated by reductions in amounts central banks might sell under that Agreement.\n - Sales must be carefully staged (in terms of periodicity, amounts, and manner) \"such as not to disturb the market.\"\n- Currency of assumptions: $500-an-ounce used as an average over a period of time rather than the then-current spot price." }, { "heading": "Investment of Fund resources and quota-related proposals", "content": "- Existing reserve investments:\n - Text contains two closely related statements: \"the Fund already invests its existing reserves, which amount to about 600 billion SDRs, just under 9 billion U.S. dollars\" and repeated phrasing later: \"The Fund already invests its existing reserves which amount to about 6 billion SDRs, just under 9 billion dollars.\" (Text preserved as in source.)\n- Near-term improvement potential:\n - Invest reserves in a manner that could generate \"perhaps 50 basis points more\" without compromising integrity and safety.\n- Quota resources reallocation proposal:\n - Release some quota resources currently used only for lending to invest in capital markets.\n - Expected excess return from investing quota resources: \"on average perhaps 100 basis points.\"\n - Illustrative magnitude: \"were say 10 billion SDRs to be used in this way, it could generate additional income for the Fund of approximately 100 million SDRs per year.\"\n- Third-party asset management:\n - Committee concluded weak case for the Fund acting as a third-party asset manager: lacks expertise; acquiring it would be expensive; many existing public and private providers already supply these services." }, { "heading": "Technical assistance and capacity-building financing", "content": "- Twin considerations:\n - Risks of underspecified charging: resources provided on a no-charge basis risk oversupply, overdemand, and lack of benchmarks for efficiency.\n - Public-good character and developmental impact: technical assistance benefits recipient countries and international monetary system stability; many recipients are low-income and may not afford charges.\n- Committee recommendations for Executive Board review:\n - Preserve utility of IMF technical-assistance and capacity-building services while ensuring efficient targeting and adequate incentives.\n - Consider economic mechanisms (including charging) to ration efficient use of resources, balanced against the risk of discouraging lower-income beneficiaries.\n - Charging need not be borne by beneficiary countries directly; costs could be covered by donor resources or explicit budgetary attribution within the Fund." }, { "heading": "Specific operational and governance points", "content": "- The report did not address Fund expenditures in depth; expenditure-side discussions to occur in Executive Board deliberations in the context of the Fund’s mission for the future.\n- Consensus-building: report must be discussed internally with the Executive Board and membership; \"the Spring Meetings will give us a very good opportunity to have a discussion with the ministers.\"\n- Timing: no specific decision timetable provided; the next few months envisioned for Board/membership discussions; broader medium-term strategy work to continue over subsequent years (reference to past and ongoing Medium-Term Strategy)." }, { "heading": "PRGF (Poverty Reduction and Growth Facility) waiver issue", "content": "- Background: IMF had waived administrative costs it incurred in managing the PRGF in years when Fund income was strong.\n- Committee observation: waiver was a discretionary choice made under income-adequacy circumstances and could be changed; donor countries might appropriately bear the administrative burden rather than the Fund generally representing both poor and middle-income countries." }, { "heading": "Press briefing Q&A highlights", "content": "- U.S. government opposition to IMF gold sales noted; Managing Director emphasized discussion with membership and consensus-building.\n- Gold price assumption: $500 per ounce chosen as a multi-year average; committee preferred averaging because sales would occur over time.\n- Concern over destabilizing the gold market addressed by limiting amount, accommodating within Central Bank Gold Agreement, and careful staging.\n- No urgency due to Fund’s strong financial position but emphasis on starting the process \"soon.\"\n\nTranscript of a press briefing, January 31, 2007 — IMF\n\n---\n\n\n References\n\n- Gold in the IMF -- A Factsheet\n- A Medium-Term Strategy for the IMF: Meeting the Challenge of Globalization\n- Technical Assistance -- A Factsheet\n- Transcripts\n- Eminent Persons Group Outlines Long-Term Revenue Plan to Finance IMF Activities\n- PRESS CENTER\n- Webcast\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/54/tr070131" } ], "bullets": [ "[Markdown version](/en/news/articles/2015/09/28/04/54/tr070131/index.md)", "[Structured JSON version](/en/news/articles/2015/09/28/04/54/tr070131/index.json)", "[Bundle manifest](/en/news/articles/2015/09/28/04/54/tr070131/bundle-manifest.json)", "Published: January 31, 2007", "Event: Press briefing on the report on sustainable long-term financing of the IMF prepared by an Eminent Persons Committee chaired by Andrew Crockett.", "Date and location: January 31, 2007, Washington DC.", "Report authorship: Committee chaired by Andrew Crockett; members included Mohamed El-Erian, Alan Greenspan, Tito Mboweni, Guillermo Ortiz, Hamad Al-Sayari, Jean-Claude Trichet, and Zhou Xiaochuan.", "Managing Director present: Rodrigo de Rato.", "Purpose: Identify an income model aligned with members’ interests and reflecting the range of public goods the IMF provides; the Committee’s mandate focused on income (not expenditure).", "Duration in practice: \"the actual income model of the institution has been in practice for 60 years.\"", "Core deficiencies identified:", "Functional decomposition of IMF activities used to evaluate income sources:", "Match multiple IMF functions with separate income sources; avoid concentration on a single source.", "Intermediation margin should: cover costs as a financial intermediary and accumulation of reserves against the possibility of arrears — not be used as the primary income source for public-good activities.", "View proposals as a package; interdependence among elements implies not every item must be adopted exactly as proposed but the package should be considered holistically.", "Although the Fund is in a strong financial position currently, begin process \"straight away\" to develop a new income model.", "If future lending generates surpluses, consider returning surpluses to members rather than accumulating reserves or funding uncosted activities.", "Recommended sale amount: \"about 400 metric tons.\"", "Rationale for 400 metric tons: corresponds to the gold that was sold and repurchased in an off-market transaction about six or seven years ago and which is legally in a slightly different category.", "Proceeds estimate at assumed price:", "Conditions and safeguards on gold sale:", "Currency of assumptions: $500-an-ounce used as an average over a period of time rather than the then-current spot price.", "Existing reserve investments:", "Near-term improvement potential:", "Quota resources reallocation proposal:", "Third-party asset management:", "Twin considerations:", "Committee recommendations for Executive Board review:", "The report did not address Fund expenditures in depth; expenditure-side discussions to occur in Executive Board deliberations in the context of the Fund’s mission for the future.", "Consensus-building: report must be discussed internally with the Executive Board and membership; \"the Spring Meetings will give us a very good opportunity to have a discussion with the ministers.\"", "Timing: no specific decision timetable provided; the next few months envisioned for Board/membership discussions; broader medium-term strategy work to continue over subsequent years (reference to past and ongoing Medium-Term Strategy).", "Background: IMF had waived administrative costs it incurred in managing the PRGF in years when Fund income was strong.", "Committee observation: waiver was a discretionary choice made under income-adequacy circumstances and could be changed; donor countries might appropriately bear the administrative burden rather than the Fund generally representing both poor and middle-income countries.", "U.S. government opposition to IMF gold sales noted; Managing Director emphasized discussion with membership and consensus-building.", "Gold price assumption: $500 per ounce chosen as a multi-year average; committee preferred averaging because sales would occur over time.", "Concern over destabilizing the gold market addressed by limiting amount, accommodating within Central Bank Gold Agreement, and careful staging.", "No urgency due to Fund’s strong financial position but emphasis on starting the process \"soon.\"", "[Gold in the IMF -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/gold-in-the-imf)", "[A Medium-Term Strategy for the IMF: Meeting the Challenge of Globalization](https://www.imf.org/external/np/exr/ib/2006/041806.htm)", "[Technical Assistance -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-capacity-development)", "[Transcripts](https://www.imf.org/en/news/searchnews)", "[Eminent Persons Group Outlines Long-Term Revenue Plan to Finance IMF Activities](https://www.imf.org/external/np/sec/pr/2007/pr0718.htm)", "[PRESS CENTER](http://presscenter.imf.org/)", "[Webcast](https://www.imf.org/external/mmedia/view.asp?eventid=690)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2015/09/28/04/54/tr070131/index.md", "json": "/en/news/articles/2015/09/28/04/54/tr070131/index.json", "bundleManifest": "/en/news/articles/2015/09/28/04/54/tr070131/bundle-manifest.json" }, "generatedAtUtc": "2026-09-27T12:38:01.702Z" }