Executive Board Progress Report to the IMFC on the Fund's Mandate

Policy Papers, October 6, 2010

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Executive Board Progress Report to the IMFC on the Fund's Mandate

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Bibliographic details

• Published: October 6, 2010
• Series: Policy Papers

Summary

• This paper responds to the IMFC call to review, in light of the crisis, the Fund’s mandate over macroeconomic and financial sector policies bearing on global stability.
• The crisis exposed weaknesses in economic oversight—national, regional, and global—prior to the crisis, prompting major institutional innovations to uncover risks and meet large and diverse financing needs.
• Despite progress, it still needs to be asked if the mandate in the Fund’s Articles is up to the challenges ahead.
• The Board’s deliberations, which are far from complete, have prompted it to emphasize practical steps to deliver on the Fund’s broad stability mandate, with any need to amend the Articles reconsidered in light of experience.
• The effectiveness of these steps will also depend on quota and governance reform, as confidence in the Fund as an impartial overseer of global stability and lender of last resort rests on its legitimacy.

Key themes and findings

• Review of the Fund’s mandate was undertaken in response to the IMFC call, motivated by lessons from the crisis.
• Institutional innovations were introduced to:
  • uncover risks, and
  • meet large and diverse financing needs.
• Ongoing Board deliberations emphasize practical steps to deliver on the Fund’s broad stability mandate rather than immediate amendments to the Articles.
• Any reconsideration of amending the Articles will be informed by experience with the practical steps taken.
• Quota and governance reform are critical to the effectiveness of the proposed steps because legitimacy underpins confidence in the Fund as an impartial overseer and lender of last resort.

Policy implications and recommendations

• Emphasize practical, implementable steps to strengthen delivery on the Fund’s broad stability mandate.
• Reassess the need to amend the Fund’s Articles only after experience with the practical steps has been accumulated.
• Pursue quota and governance reform to bolster the Fund’s legitimacy and thereby enhance its effectiveness as an impartial overseer of global stability and lender of last resort.

Content in this bundle

• Executive Board Progress Report to the IMFC on the Fund’s Mandate; IMFC Documents; October 1, 2010
  • Executive Board Progress Report to the IMFC on the Fund’s Mandate; IMFC Documents; October 1, 2010 (Markdown version)
  • Executive Board Progress Report to the IMFC on the Fund’s Mandate; IMFC Documents; October 1, 2010 (PDF)