Press Release No. 14/494

Press Release: IMF Management and Staff Welcome Independent Evaluation Office's Report on the IMF Response to the Financial and Economic Crisis

November 4, 2014

Management and staff of the International Monetary Fund (IMF) welcomed today the report released by the Independent Evaluation office (IEO) on the “IMF Response to the Financial and Economic Crisis,” and broadly supported its recommendations. The report assesses the Fund’s actions to help contain the crisis and navigate the global recovery, assist individual economies to cope with the impact of the crisis, and identify and warn about future risks.

“I am pleased by the IEO’s finding that the IMF played an important role in the global response to the crisis,” Managing Director Christine Lagarde said in a statement. “The assessment further establishes that the policy advice provided by staff was flexible and adaptable, while IMF-supported programs reflected many lessons from past crises and helped members cope with the crisis fallout. These findings are reassuring,” she added.

On post-crisis surveillance, Ms. Lagarde welcomed the IEO’s assessment that much of the IMF’s policy advice had been appropriate, particularly the call for fiscal stimulus in 2008-09 and the support for expansionary monetary policies in advanced economies.

Turning to the IMF’s advocacy in 2010 for fiscal consolidation in major advanced economies, Ms. Lagarde supported the policy advice given at the time. “I strongly believe that advising economies with rapidly rising debt burdens to move toward measured consolidation was the right call to make”, she said. Ms. Lagarde also noted that once it became clear that the growth outlook had worsened, the IMF quickly changed gear and adjusted its advice for countries where such adjustment was feasible,

In her statement, Ms. Lagarde agreed with the IEO’s call for further integrating and consolidating risk and vulnerability analyses, and making them more user-friendly, noting that it echoes similar feedback in the recent Triennial Surveillance Review (TSR). “We will also continue to find ways to improve our work on vulnerabilities and risks so that they can most effectively inform our surveillance,” she added.

Finally, Ms. Lagarde agreed with the suggestion to develop principles of IMF engagement with regional and other organizations, albeit noting that such interactions should remain generally flexible and pragmatic, while ensuring evenhandedness. She also welcomed the IEO’s emphasis of adequate and stable resources to reduce uncertainty and strengthen the IMF’s legitimacy, and reiterated that implementation of the 2010 quota and governance reforms remains the highest priority.

See also the Staff Response to the IEO Report and a summary of the Executive Board discussion.