{ "title": "Transcript of International Monetary and Financial Committee (IMFC) Press Briefing", "publication": "IMF News, October 11, 2008", "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/54/tr101108", "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/54/tr101108", "overlayPath": "/en/news/articles/2015/09/28/04/54/tr101108/index.md", "summary": "Date and location: Washington D.C. October 11, 2008", "publishDate": "2008-10-11", "sections": [ { "heading": "Meeting context and participants", "content": "- Date and location: Washington D.C. October 11, 2008\n- IMFC meeting number: 80th meeting\n- Principal speakers at the briefing:\n - Youssef Boutros-Ghali, IMFC Chair\n - Dominique Strauss-Kahn, IMF Managing Director\n - John Lipsky, First Deputy Managing Director, IMF\n - Masood Ahmed, External Relations Director, IMF (moderator)\n- IMFC membership referenced: 185 countries" }, { "heading": "Main messages and collective decisions", "content": "- Endorsement of coordinated G-7 plan of action\n - The IMFC “endorsed the G-7 plan of action” and stressed that “because the crisis is global, the solution cannot be local.”\n - Emphasis on coordination, consistency, cohesion, and a global response across developed and developing countries.\n- Mandate to the IMF\n - The IMFC asked the Fund “to take the lead in drawing the lessons, the policy lessons from the crisis and recommending effective action to restore confidence.”\n - The Fund was called on to “take the lead in initiating discussions with other institutions, with other participants, with other parties, G-20 and others” to (i) avoid repeat crises, (ii) establish warning systems, and (iii) develop policy principles to address the crisis and its fallout.\n- Activation of IMF emergency procedures and instrument development\n - The IMFC “endorsed the decision I made a few days ago to activate our emergency procedures so that we will be able to act faster than the normal circumstances.”\n - The Fund plans to develop new liquidity instruments and has recently revised its Exogenous Shocks Facility; a “new liquidity facility” is being worked on to help countries balance payments." }, { "heading": "Assessment of crisis severity and required responses", "content": "- Nature of the crisis: described as “systemic,” requiring “systemic measures.”\n- Key policy priorities highlighted:\n - Use “all available tools to support systematically important financial institutions and prevent their failure.”\n - Unfreeze markets, guarantee money markets and deposits, support secondary markets, and recapitalize banks where needed.\n - Coordination across countries even where legal and institutional arrangements differ; leave implementation modalities to national governments.\n- Scale of fiscal and balance-sheet responses\n - Collective government actions to date were characterized as “well beyond the trillion” when adding amounts pledged by the U.S., European Union, and others.\n- Funding and market functioning\n - Restoring bank funding was identified as “the main question” and the immediate priority for unfreezing markets and restoring lending and liquidity." }, { "heading": "Emerging markets, low-income countries, and spillovers", "content": "- Vulnerabilities and IMF readiness\n - Concern that the financial crisis could have a fall-out on emerging markets and low-income countries.\n - The Committee signified resolve “through the Fund” to assist countries that need emergency instruments and emergency funding.\n - The Managing Director: “The Fund has plenty of resources available now to be able to face all kind of demands,” and the Fund can turn to shareholders to increase resources if needed.\n- Drivers of requests for IMF support\n - Many countries face drying up of private capital inflows and reductions in trade finance and credit lines, prompting requests for IMF support.\n- Country example — Egypt\n - Anticipated spillover channel for Egypt is via the global real economy slowdown affecting exports; Egypt’s banking system was described as less exposed to impaired international assets.\n - Egypt’s recent reforms provide policy cushion: budget deficit “although large, is in control,” current account “is still in surplus,” and growth strongly supported by domestic demand and regional foreign investment.\n- Food and fuel price concerns\n - The Managing Director emphasized ongoing effects from higher food and energy prices on emerging and low-income countries, noting “the bill for those countries as far as food is concerned, for instance, is still higher than it was before.”\n - IMF support provided so far: “we already helped about 15 of them with our financing facilities, some others are in the pipeline.”\n - Appeal to donors: concern that pledged aid for food crises may be at risk as advanced-country budgets face strain; appeal not to cut such assistance because of severe consequences like malnutrition." }, { "heading": "Financial sector structure and regulatory issues", "content": "- Derivatives and risk management\n - Reference to prior concerns about the derivatives market (cited figure: $416 trillion estimated value by the BIS) and acknowledgment that markets intended to transfer risk more efficiently suffered “failures of risk management, regulatory weaknesses.”\n - The IMF’s Global Financial Stability Report had documented emerging risks; downside risks “have emerged and need to be dealt with in a very serious way.”\n- Recapitalization and coordination risks\n - Recapitalization programs (example: U.K.) raise concerns about capital flows and competitive distortions if not coordinated; IMF and IMFC stressed the need for coordination to avoid damaging cross-border flows." }, { "heading": "Communication, confidence, and expected near-term effects", "content": "- Confidence restoration\n - Collective endorsement by all IMF members of the G-7 actions was presented as critical to restoring market and public confidence: “We are all, 185 members of the IMF, we are all committed to the plan of action.”\n - Explicit market-signaling commitments included that “no one is going to let an important financial institution fail.”\n- Implementation and timing\n - Expectations expressed that a number of measures “will be in the coming days coming forward” and that decisive actions would unfold “in the coming weeks.”\n- IMF operational posture\n - The Fund activated emergency procedures and is already assisting countries that have requested support; new liquidity instruments are being developed to be activated as needed.\n\nTranscript of International Monetary and Financial Committee (IMFC) Press Briefing — October 11, 2008\n\n---\n\n\n References\n\n- Arab Republic of Egypt and the IMF\n- Transcripts\n- IMFC Communiqué\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/tr101108" } ], "bullets": [ "[Markdown version](/en/news/articles/2015/09/28/04/54/tr101108/index.md)", "[Structured JSON version](/en/news/articles/2015/09/28/04/54/tr101108/index.json)", "[Bundle manifest](/en/news/articles/2015/09/28/04/54/tr101108/bundle-manifest.json)", "Published: October 11, 2008", "Date and location: Washington D.C. October 11, 2008", "IMFC meeting number: 80th meeting", "Principal speakers at the briefing:", "IMFC membership referenced: 185 countries", "Endorsement of coordinated G-7 plan of action", "Mandate to the IMF", "Activation of IMF emergency procedures and instrument development", "Nature of the crisis: described as “systemic,” requiring “systemic measures.”", "Key policy priorities highlighted:", "Scale of fiscal and balance-sheet responses", "Funding and market functioning", "Vulnerabilities and IMF readiness", "Drivers of requests for IMF support", "Country example — Egypt", "Food and fuel price concerns", "Derivatives and risk management", "Recapitalization and coordination risks", "Confidence restoration", "Implementation and timing", "IMF operational posture", "[Arab Republic of Egypt and the IMF](http://www.imf.org/external/country/EGY/index.htm)", "[Transcripts](https://www.imf.org/en/news/searchnews)", "[IMFC Communiqué](https://www.imf.org/external/np/cm/2008/101108a.htm)", "[PRESS CENTER](http://presscenter.imf.org/)", "[Webcast](https://www.imf.org/external/mmedia/view.asp?eventID=1261)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2015/09/28/04/54/tr101108/index.md", "json": "/en/news/articles/2015/09/28/04/54/tr101108/index.json", "bundleManifest": "/en/news/articles/2015/09/28/04/54/tr101108/bundle-manifest.json" }, "generatedAtUtc": "2026-09-27T13:18:48.200Z" }