Policy Papers

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2004

February 23, 2004

Integrating the Balance Sheet Approach into Fund Operations

Description: This note provides Directors with a summary of the work that is underway to integrate the balance sheet approach (BSA) into the Fund's operations. During the informal Board discussion last July, Directors concluded that the BSA provides a useful analytical framework to detect currency mismatches and other balance sheet weaknesses of an economy as a whole and of its main sectors, which could help the Fund to strengthen its vulnerability analysis and policy advice. While it was noted that elements of the BSA are already being used as a complement to traditional flow-based analysis, Directors encouraged staff to develop a strategy to further advance the BSA in Fund operations.

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