## IMF Executive Board Reviews Proposal to Update the Monetary and Financial Policies Transparency Code _IMF News, May 13, 2019_ ## Source details **Canonical URL:** [IMF Executive Board Reviews Proposal to Update the Monetary and Financial Policies Transparency Code](https://www.imf.org/en/news/articles/2019/05/13/pr19163-imf-executive-board-reviews-proposal-update-monetary-financial-policies-transparency-code) ## Other formats - [Markdown version](/en/news/articles/2019/05/13/pr19163-imf-executive-board-reviews-proposal-update-monetary-financial-policies-transparency-code/index.md) - [Structured JSON version](/en/news/articles/2019/05/13/pr19163-imf-executive-board-reviews-proposal-update-monetary-financial-policies-transparency-code/index.json) - [Bundle manifest](/en/news/articles/2019/05/13/pr19163-imf-executive-board-reviews-proposal-update-monetary-financial-policies-transparency-code/bundle-manifest.json) ## Bibliographic details - Published: May 13, 2019 --- ### Background and Rationale - On April 29, 2019, the Executive Board of the International Monetary Fund (IMF) discussed a staff paper proposing to replace the Monetary and Financial Policies Transparency (MFPT) Code with a new Central Bank Transparency (CBT) Code. - The update is in line with the recommendations of the 2017 Joint Review of the Standards and Codes Initiative, indicating the need for risk-based assessments to support policy effectiveness and address macroeconomic risks. - Rationale for change: - Remove overlap in the MFPT with transparency elements of financial policies covered by other international standards. - Expand central bank transparency standard to a broader set of activities undertaken by many central banks since the Global Financial Crisis (GFC), including changes in monetary policy practices. ### Scope and Design of the Proposed CBT - Key design features: - Modular, risk-based, and proportional setup to account for country-specific circumstances. - Applicability to all IMF members, including less-developed economies. - Orientation toward risk-based assessments to support policy effectiveness and address macroeconomic risks. - Intended uses: - Serve as a tailored diagnostic tool in IMF capacity development. - Support IMF surveillance such as Article IV reviews and Financial Sector Assessment Programs. - Be useful in an IMF Program context, as was the case for the MFPT. ### Executive Board Assessment - Press Release No. 19/163; discussion dated April 29, 2019; release dated May 13, 2019. - Summary of Directors’ views: - Welcomed consideration of the staff proposal to update the MFPT Code and endorsed replacing the MFPT with the CBT. - Viewed the proposed CBT as appropriate to remove overlap with other FSB standards and to expand transparency standards reflecting post-GFC central bank activities. - Supported reorienting transparency standards to facilitate risk-based assessments in line with the 2017 Joint Review. - Emphasized that the CBT should be relevant for all member countries, including less‑developed and smaller economies. - Agreed that the modular approach would help facilitate a risk‑based and proportional application taking into account country‑specific circumstances and needs. - Broad concurrence that CBT can serve as a diagnostic tool in capacity development and help central banks map their transparency frameworks. - Many Directors considered CBT assessments could help support Fund surveillance. - Some Directors underscored the importance of clarifying the voluntary nature of the CBT. - Directors’ procedural expectations: - Asked for broader consultation on the proposed CBT, including with monetary authorities, other international institutions, and the Executive Board. - Requested more regular updates to the Executive Board as the CBT is developed. - Note on qualifiers: - An explanation of any qualifiers used in the summing up can be found here: https://www.imf.org/external/np/sec/misc/qualifiers.htm. ### Governance, Confidentiality, and Balance - Directors welcomed that the CBT will take as given the mandates, policies, and governance arrangements of central banks. - Clarifications: - The CBT will not provide a central bank governance framework, nor is it a means to assess or pass judgement on the governance of central banks. - Trade-offs highlighted: - Central banks face trade‑offs between transparency and the legitimate need for confidentiality. - The CBT should strike an appropriate balance between transparency and confidentiality, preserving flexibility for market-sensitive information and financial stability and policy effectiveness objectives. ### Advisory Group and Consultations - Directors supported convening an international Advisory Group to provide guidance to staff in elaborating the new code. - Expectations for the Advisory Group: - Members should be selected from diverse backgrounds and regions to ensure broad representation of views and experiences. ### Administrative and Contact Information - Press Release date: May 13, 2019. - Press office contact: - PRESS OFFICER: Meera Louis - Phone: +1 202 623-7100 - Email: MEDIA@IMF.org *IMF Executive Board Reviews Proposal to Update the Monetary and Financial Policies Transparency Code — Press Release No. 19/163, May 13, 2019* --- ## References - [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg) - [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/external/np/sec/misc/qualifiers.htm](https://www.imf.org/external/np/sec/misc/qualifiers.htm) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2019/05/13/pr19163-imf-executive-board-reviews-proposal-update-monetary-financial-policies-transparency-code_