Press Release: IMF Managing Director Rodrigo de Rato Unveils Plans to Strengthen IMF Financial Market Work
February 1, 2006Press Release No. 06/21
Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), today announced proposals to strengthen the Fund's financial and capital market work by creating a new department that will be a center of excellence for all aspects of financial, capital market, and monetary work in the IMF.
The new department, which will start work in the middle of the year, will merge the functions and staff of two existing departments, the International Capital Markets Department (ICM) and the Monetary and Financial Systems Department (MFD).
Today's decision is the result of extensive review by Management on the Fund's work in this area, including in the Managing Director's September 2005 Report on the Fund's Medium-Term Strategy, and it follows a review by a working group led by William J. McDonough http://www.imf.org/external/np/omd/2005
/eng/091505.pdf and Press Release No. 05/132).
Announcing the change, Mr. de Rato said, "Over the course of its 60-year existence, the Fund has successfully adapted to changing global economic circumstances in order to assist its membership and perform its important function of global and bilateral surveillance.
Nowhere is this challenge more important for the future effectiveness of the Fund than in the rapidly evolving financial and capital market arena.
"The changes I have announced today will put financial issues at the center of the Fund's work and ensure that our financial expertise better serves our 184 country members. In a globalized world where capital moves almost instantaneously across borders, the distinction between domestic and international financial markets is increasingly blurred. Similarly, the supervision and regulation of banks and capital markets, and the conduct of monetary policy need to take into account global integration.
"By bringing under one roof work that is currently spread among a number of departments we will improve the cohesion of our work and use our resources efficiently. I see this merger as logical evolution of the work the Fund has been doing in this area over the past several years. I am particularly pleased that in my discussions with staff over recent weeks, I have found support and ownership for this proposal," Mr. de Rato said.
Mr. de Rato also announced the establishment a Financial Sector Steering Committee, which he will chair, to guide the merger, and—going forward—to coordinate financial sector work, and ensure close involvement of IMF management in financial sector issues.
A search process to appoint a head of the merged department will begin shortly. The name of the new department will be announced in due course.
ICM, which was set up in 2001 to enhance the Fund's surveillance, crisis prevention and crisis management activities, has been headed for the past five years by Gerd Häusler, who has earlier informed Mr. de Rato of his intention to leave the Fund in mid-2006. MFD fulfils a core mandate of the IMF by advising member countries on issues related to central banking, monetary and exchange management, financial sector institutions and reforms, and financial system soundness. Its director, Stefan Ingves, was recently appointed Governor of Sveriges Riksbank, Sweden's central bank.
Mr. de Rato paid tribute to Messrs. Häusler and Ingves.
"Gerd Häusler and Stefan Ingves have led the Fund's financial, capital market, and monetary work in the IMF with great distinction over the past several years. The Fund's membership, and its Management and staff, owe a debt of gratitude to Gerd and Stefan for their contribution."