Selected Decisions and Selected Documents of the IMF, Fortieth Issue -- Risk Acceptance Statements

Prepared by the Legal Department of the IMF
As updated as of April 30, 2019

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ARTICLE V, SECTION 3(a), (b), AND (c)
Use of Fund Resources


  • 1. The Executive Board reviewed the specific risk acceptance statements embedded in existing Fund’s policies and processes as set forth in SM/16/7, Rev. 3, 2/17/16 and considered them appropriate, in view of existing safeguards and given the Fund’s mandate.

  • 2. The Executive Board endorsed the following overarching statement of the Fund’s risk acceptance:

    The promotion of the stability of the international monetary system is the unifying theme that defines the scope and content of the diverse functions conferred upon the International Monetary Fund (hereafter referred to as “the Fund”) by the Articles of Agreement and guides its risk acceptance and tolerance levels. The Fund recognizes that there is an element of risk in any decision or activity it undertakes and seeks to ensure that strong safeguards are in place. Thus, the Fund strives to operate with the least level of risk but acknowledges that, in the conduct of its core functions—surveillance, lending, and capacity development—it may need to undertake activities that require a certain degree of risk acceptance, given their bearing on the Fund’s ability to fulfill its mandate. In particular, as the central institution for the international monetary system, the Fund monitors and limits accepted risks in its lending activities to ensure they remain within the boundaries of its legal and policy framework. Qualification requirements, program conditionality, and other program modalities provide important safeguards. Moreover, risks are further mitigated by the general recognition of the Fund’s preferred creditor status, the established remedial measures on overdue financial obligations to the Fund, and, ultimately, the Fund’s precautionary balances and burden sharing mechanism. Operationally risks are managed through defined processes and internal controls that emphasize the importance of integrity, maintaining high quality and diverse staff, and public accountability. Across its functions, the Fund recognizes the need to prudently adhere to the Fund’s medium-term strategic budget. In taking any decision, the Fund also weighs carefully the risks to its credibility and reputation with a view to furthering the effective pursuit of its mandate.

  • 3. The Executive Board approves the publication of the statement set forth in paragraph 2 of this decision.

Decision No. 15948-(16/15),

February 17, 2016

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