Policy Papers
2010
September 24, 2010
Framework Administered Account for Selected Fund Activities - Belgium Subaccount for Selected Fund Activities
Description: In March 2009, the Fund established a new Framework Administered Account to administer external financial resources for selected Fund Activities (the “SFA Instrument”). The financing of activities under the terms of the SFA Instrument is implemented through the establishment and operation of a subaccount within the SFA. This paper requests Executive Board approval to establish the Belgium Subaccount for Selected Fund Activities (the “Subaccount”) under the terms of the SFA instrument.
September 21, 2010
Proposed Decision on Article IV Consultation Cycles
Description: The proposed Decision seeks to implement the staff’s proposals related to Article IV consultation cycles in Review of the Fund’s Mandate—Follow-Up on Modernizing Surveillance, which were endorsed in principle by the Executive Board on September 1, 2010. The goal is to provide for greater flexibility in consultation cycles and simplify the rules governing consultation cycles for members under a Fund arrangement or Policy Support Instrument (PSI).
September 21, 2010
Update on the Financing of the Fund's Concessional Assistance and Debt Relief to Low-Income Member Countries
Description:
A new framework to facilitate mobilization of loan resources for the PRGT became effective in June 2010. It includes a voluntary encashment regime allowing claims of participating creditors to qualify as reserve assets; the issuance of PRGT notes; and a revised framework for borrowing in SDRs.
Members have responded positively to the Managing Director’s fund-raising request. Thirteen members have pledged about SDR 9.3 billion in additional loan resources, compared to the target of SDR 10.8 billion (including provision for a liquidity buffer to facilitate encashment). New loan and note purchase agreements totaling SDR 7.2 billion have been signed so far with nine lenders. Five of these borrowing agreements provide loan resources in SDRs. It remains important to mobilize additional loan resources to complete the financing package.
September 14, 2010
Heavily Indebted Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI)--Status of Implementation
Description:
This report provides an update on the status of implementation, impact, and costs of the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).
Debt relief provided under the Initiatives has substantially alleviated debt burdens in recipient countries. Through the continued use by IDA and the Fund of the flexibility available in the framework governing the HIPC Initiative and the MDRI, significant progress has been achieved under the Initiatives since the last report.
September 7, 2010
Reference Note on Trade in Financial Services
Description: This note addresses key issues with respect to trade policy in financial services and its linkages to capital flows, and prudential regulations and supervision under the General Agreement on Trade in Services (GATS), preferential trade agreements (PTAs), and bilateral investment treaties (BITs). The note should help inform the advice that country teams provide on such issues in the context of surveillance, program negotiations, and technical assistance. It is a response to the Executive Board’s call for guidance in this area stemming from the 2009 IEO Evaluation of IMF Involvement in International Trade Policy Issues.
September 7, 2010
Bhutan - Assessment Letter for the World Bank
Description: Bhutan’s growth was resilient to the financial crisis and the outlook remains positive. Containing fiscal expansion and enhancing liquidity management are necessary to avoid economic overheating. Strengthening bank supervision is also a top priority.
September 2, 2010
Fourteenth General Review of Quotas - Further Considerations
Description: This paper provides the basis for the next round of discussions on the 14th General Review of Quotas. The Committee of the Whole (COW) has so far met three times this year: in March and July to consider the realignment of quota shares, and in April for an initial discussion on the size of the overall increase. Directors also met informally with the Managing Director on July 22 to take stock of the remaining issues, keeping in mind the tight timetable for completing the review and the need for flexibility and compromise from all sides. As discussed at the informal meeting, the Board recess provided an opportunity to take stock of the different positions and seek guidance from capitals on possible ways forward, with the goal of reaching a pragmatic solution that could bridge the remaining gaps within the relatively short period of time still available.
August 31, 2010
Integrating Stability Assessments Under the Financial Sector Assessment Program into Article IV Surveillance-Background Material
Description:
This paper presents the staff analysis underpinning two central elements of the proposal to make financial stability assessments under the FSAP mandatory for members with systemically important financial sectors:
the definition of systemic importance used in the paper and the methodology for identifying members with systemically important financial sectors (Section II); and
the review of the literature and industry practices that form the basis for the staff proposal to conduct these mandatory financial stability assessments at a frequency of about three years (Section III).
August 31, 2010
Integrating Stability Assessments Under the Financial Sector Assessment Program into Article IV Surveillance - Revised Proposed Decision
Description: Recognizing the important impact that a member’s domestic economic and financial policies can have on systemic stability, Article IV of the IMF’s Articles of Agreement establishes obligations for members respecting the conduct of these policies, including their financial sector policies. An examination of members’ financial sector policies is important in all cases of bilateral surveillance, and three quarters of the Fund’s membership has already undergone a financial stability assessment. With this Decision, the Fund decides that, taking into account the framework described above and the overall purpose of surveillance, heightened scrutiny should be given in bilateral surveillance to the financial sector policies of those members whose financial sectors are systemically important, given the risk that domestic and external instability in such countries will lead to particularly disruptive exchange rate movements and undermine systemic financial and economic stability. The mandatory financial stability assessments undertaken under this Decision will consist of the following elements: a) an evaluation of the source, probability, and potential impact of the main risks to macro-financial stability in the near-term for the relevant financial sector; b) an assessment of the authorities’ financial stability policy framework; and c) an assessment of the authorities’ capacity to manage and resolve a financial crisis should the risks materialize.
August 27, 2010
Integrating Stability Assessments Under the Financial Sector Assessment Program into Article IV Surveillance
Description:
Integration of financial sector issues into bilateral surveillance has been a long-standing challenge. Financial stability is a key component of the domestic and external stability of members and is important for the promotion of the “stable system of exchange rates” envisaged under Article IV. But although financial sector issues and policies are at the core of the Fund’s surveillance mandate, their effective integration has been a challenge.
To address this challenge, it is proposed to adopt a more risk-based approach to financial sector surveillance by making FSAP stability assessments part of Article IV surveillance for members with systemically important financial sectors.