Policy Papers
2015
September 9, 2015
The Fund's Income Position for FY 2015 - Actual Outcome
Description:
This paper reports the Fund’s income position for FY 2015 following the closing of the Fund’s accounts for the financial year and completion of the external audit. FY 2015 net income, including income from surcharges, amounted to SDR 1.6 billion or about SDR 133 million more than estimated in April. The bulk of this difference reflects a smaller net loss in the valuation reported under the revised accounting standard for employee benefits (IAS 19).
In accordance with decisions taken in April 2015, investment income from the Fixed-Income Subaccount of SDR 84 million has been transferred from the Investment Account to the GRA. GRA net income for FY 2015 of SDR 1.5 billion has been placed to the Fund’s reserves, further strengthening the Fund’s precautionary balances, which reached SDR 14.2 billion at the end FY 2015.
September 4, 2015
Seventh Periodic Monitoring Report on the Status of Implementation Plans in Response to Board-Endorsed IEO Recommendations
Description: The Seventh PMR includes: (i) a discussion of progress made over the last year on the actions corresponding to four Management Implementation Plans (MIPs) that were classified as still “in progress” in the previous PMR; and (ii) an assessment of the progress made in achieving the high-level objectives in three areas directly related to those MIPs. In addition, an update on substantive issues related to five older MIPs agreed since 2007 is provided at the end of the report. Three new evaluations have been completed by the IEO since March 2014. In July and August 2015, Management issued the MIPs in response to these evaluations. Given that only a short time has passed since their completion, progress in addressing the actions contemplated in those MIPs will be discussed in the next PMR.
September 3, 2015
Statement by the Managing Director on the Independent Evaluation Office Report on Self-Evaluation at the IMF - An IEO Assessment - Executive Board Meeting - September 18, 2015
Description: The thrust of the report’s recommendations to strengthen the institutional framework for self-evaluation, adapt it over time to changing circumstances, and better disseminate lessons from self-evaluation are well taken. I believe, however, that there is considerable scope to address these recommendations by refining and building on existing processes and initiatives already underway rather than by introducing substantial new architecture. I see limited value added relative to the costs in following through with the report’s two other key recommendations; namely, to conduct self-assessment for every IMF-supported program and to set out plans ex ante to self-evaluate every policy and thematic review.
September 1, 2015
Improving Public Investment Efficiency in the G-20
Description:
Through the provision of both social and economic infrastructure, public investment can serve as an important catalyst for economic growth. A significant body of theoretical and empirical research underscores the positive relationship between investment in high-quality public infrastructure and economy-wide productivity.1 Against the background of a steady decline in public investment as a share of GDP in advanced economies, evidence of infrastructure bottlenecks in emerging economies, and the sluggish global economic recovery, the G-20 has called for ramping up public investment to raise long-run economic growth (G-20, 2014).2 However, the economic and social impact of public investment crucially depends on its efficiency. Despite anecdotal evidence of projects plagued by time delays, cost overruns, and inadequate maintenance, there are few robust empirical studies of the determinants of public investment efficiency.
This paper explores the link between public investment management (PIM) institutions and the efficiency of public investment for the G-20 countries. Based on the analysis from a recent IMF study, the paper finds that better PIM enhances public infrastructure quality, and pinpoints key institutional reforms needs to boost public investment efficiency (IMF 2015). These findings and recommendations are based on a comprehensive data set on investment, infrastructure and capital stocks, and two analytical innovations: (i) a new cross-country Public Investment Efficiency Index (PIE-X); and (ii) a new Public Investment Management Assessment (PIMA) which is applied to G-20 countries.
August 28, 2015
Monetary Policy and Financial Stability
Description:
The issue of using monetary policy for financial stability purposes is hotly contested. The crisis was a reminder that price stability is not sufficient for financial stability, financial crises are costly, and policy should aim to decrease the likelihood of crises, not only rely on dealing with their repercussions once they occur.
It is clear that well-targeted prudential policies (including micro and macroprudential regulation and supervision) should be pursued actively to attenuate the buildup of financial risks.
The question is whether monetary policy should be altered to contain financial stability risks. Should it lend a hand by temporarily raising interest rates more than warranted by price and output stability objectives? Keeping rates persistently higher is also possible, but more costly.
August 25, 2015
Key Trends in Implementing the Fund's Transparency Policy
Description: At the time of the 2005 Review of the Fund’s Transparency Policy, the Executive Board requested regular updates on trends in implementing the transparency policy. The tables in this report provide an overview of recent developments, reflecting information on documents considered by the Board in 2014 and updating the previous annual report on Key Trends. Deeper analysis of these trends is undertaken in the context of periodic reviews of the Fund’s Transparency Policy.
August 5, 2015
FY2015 Administrative and Capital Expenses and Output Cost Estimates
Description:
The administrative expenditure outturn for FY2015 reflects continued budget discipline, as new demands and initiatives were accommodated through reprioritization and better use of existing resources within an unchanged envelope. The overall budget utilization rate of 98 percent was achieved through more efficient personnel management practices and effective reallocation of resources from underutilized areas to areas of emerging pressure.
In terms of outputs, the Fund continued its focus on addressing global policy challenges and reducing vulnerabilities. Resources allocated to multilateral surveillance, oversight of the global systems and capacity development increased while bilateral surveillance and lending declined moderately, in line with easing of crisis-related work. Spending by country reflects a continued shift towards a more risk-based approach, consistent with the established priorities.
Capital expenditures mainly reflected the major renovation of the HQ1 building and improvements in information technology infrastructure and security to better support the staff’s work and protect information assets.
August 4, 2015
SDR Currency Basket—Proposed Extension of the Valuation of the SDR
Description: This paper proposes an extension of the current SDR valuation basket for a period of nine months to September 30, 2016. This extension would respond to feedback from SDR users on the desirability of avoiding changes in the basket at the end of the calendar year and facilitate the continued smooth functioning of SDR-related operations. As discussed at the informal Board meeting on July 29, this proposal does not in any way prejudge the outcome of the Review of the Method of Valuation of the SDR.
July 16, 2015
Balance Sheet Analysis in Fund Surveillance - Reference Note
Description:
This note serves as a reference for balance sheet analysis, which should be read in conjunction with the IMF board paper on Balance Sheet Analysis in Fund Surveillance.
It provides a: compendium of good examples of balance sheet analysis from both bilateral and multilateral surveillance, covering a variety of topics; full listing of available balance sheet related macro datasets, including their relevance for surveillance, remaining limitations, and remedial measures being undertaken; summary of data availability for each Fund member; compilation of all the tools for balance sheet analysis developed by the Fund over the last decade; and toolkit featuring some new empirical applications that could help deepen balance sheet analysis in surveillance. These include illustrations of how to construct and use BSA matrices, general equilibrium and reduced form approaches, as well as tools to analyze sectoral vulnerabilities using micro data.
July 16, 2015
Review of the Method of Valuation of the SDR - Initial Considerations
Description:
This paper lays out initial considerations for the quinquennial review of the method of valuation of the Special Drawing Right (SDR) currency basket. As in previous reviews, a key objective is to enhance the attractiveness of the SDR as an international reserve asset. In that context, the review will assess the currencies for SDR basket inclusion, currency weights, and the SDR interest rate basket.
The paper takes as a starting point the conclusions of the last review in 2010 and the subsequent Board discussion of currency selection criteria in 2011. At the time of the last review, China met the gateway export criterion but the renminbi (RMB) was not included in the SDR basket as it was not judged to be freely usable, the second currency selection criterion. In light of the Board’s broad support in 2011 for the existing legal framework, and since China continues to meet the export criterion, this paper discusses building blocks relevant for a future determination on whether to include the RMB in the basket under the existing criteria.