Policy Papers
2012
March 29, 2012
FY2013-FY2015 Medium-Term Budget
Description:
The FY 13–15 Medium-Term Budget presented in this paper reflects the following main features:
Unchanged administrative budget in real terms for FY 13. Overall spending (structural plus crisis/temporary) will be kept unchanged in real terms in FY 13 relative to the FY 12 budget (excluding the one-off additional cost of the 2012 Annual Meetings in Tokyo).
Broadly unchanged administrative envelope in nominal terms for FY 13. This reflects the impact of the Executive Board’s decision in March to grant no increase in the staff salary structure in the context of the 2012 Compensation Review. The “structure increase” is the main component in the budget deflator applied to map the real total envelope into nominal terms.
A capital budget dominated by the impact of the HQ1 Renewal Program. The final appropriation for this project, approved by the Executive Board in March 2011, is reflected in the proposed capital budget for FY 13.
March 21, 2012
Handbook of IMF Facilities for Low-Income Countries
Description: The Fund’s concessional facilities are aimed at providing flexible and tailored support to low-income countries (LICs) in their efforts to achieve, maintain, or restore a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth.
March 20, 2012
Framework Administered Account for Selected Fund Activities - International Forum Sovereign Wealth Funds Subaccount
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 International Forum of Sovereign Wealth Funds Subaccount (the "Subaccount") under the terms of the SFA Instrument.
March 16, 2012
Enhancing Surveillance - Interconnectedness and Clusters - Background Paper
Description: This paper provides additional detail for the framework discussed in “Enhancing Surveillance – Interconnectedness and Clusters” through theoretical and empirical analysis of linkages, including case studies of Saudi Arabia, the Asian supply chain, financial interconnectedness and cross-border policy dependence in banking, and the Sweden-Baltic connections. It also provides a detailed primer on network analysis.
March 15, 2012
Enhancing Surveillance - Interconnectedness and Clusters
Description: This paper and the companion background paper present a simple conceptual framework to better understand cross-border trade and financial interconnectedness. Countries are grouped together into “clusters” on the basis of having relatively tight trade and financial connections (e.g., Asian supply chain). Clusters are connected to one another through “gatekeepers” (e.g., Austria is a gatekeeper to the Central and Eastern Europe, and Sweden to the Baltics), and countries that are central to the whole network are in the “core” (the systemic-5). By mapping this architecture of cross-border trade and financial interconnectedness, the papers provide—at a glance—an easy way to comprehend the direct and indirect linkages of countries. The papers suggest that gatekeepers in particular can play a role in dampening or amplifying and propagating shocks, and this role depends on the economic context and policy space.
March 14, 2012
Liberalizing Capital Flows and Managing Outflows - Background Paper
Description: Liberalization of capital flows can benefit both source and recipient countries by improving resource allocation, reducing financing costs, increasing competition and accelerating the development of domestic financial systems. The empirical evidence, however, is mixed on the benefits, and it suggests that countries benefit most when they meet certain thresholds related to institutional and financial development. The principal cost of capital flow liberalization stems from the economic instability brought on by volatile capital flows. In extreme cases, sudden stops or reversals in capital inflows can trigger financial crises followed by prolonged periods of weak growth.
March 13, 2012
Framework Administered Account for Selected Fund Activities -Government of Canada Subaccount
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 subaccounts. This paper requests Executive Board approval to establish the Government of Canada Subaccount for Selected Fund Activities (the "Subaccount") under the terms of the SFA Instrument.
March 13, 2012
Liberalizing Capital Flows and Managing Outflows
Description: This is the fourth in a series of Board papers developing a comprehensive Fund view on capital flows and the policies that affect them. A first paper in December 2010 dealt with the Fund’s overall role in this area, both historically and prospectively. The second paper in March 2011 developed a framework for policy advice on managing capital inflows broadly endorsed by the Board, which constitutes a first round articulation of the Fund’s institutional views on managing capital inflows. The third paper in November 2011 examined the multilateral aspects of policies affecting capital flows, and focused mainly on source country policies. This paper covers liberalizing capital flows and the management of outflows.
March 9, 2012
Proposed Amendment of the Extended Fund Facility - Considerations to Extend the Duration of Extended Arrangements on Approval from Three to Four Years
Description:
The EFF Decision currently provides that extended arrangements will be approved for periods not exceeding three years but that, where appropriate, the period of an existing arrangement may be lengthened to a duration of up to four years. This note proposes that the EFF Decision be amended to allow for extended arrangements to be approved for up to four years from the outset.
The reforms to the IMF lending toolkit since 2009 have injected additional flexibility and allowed better tailoring to countries’ varying circumstances. These reforms have enabled the Fund to better respond to the wide-ranging needs of member countries by, among other things, establishing new and more tailored facilities, increasing access limits, clarifying exceptional access criteria, streamlining conditionality, and reforming charges while maintaining adequate Fund safeguards.
March 2, 2012
Proposed Amendment on the Reform of the IMF Executive Board and Fourteenth General Review of Quotas—Status of Acceptances and Consents
Description: This paper reviews progress toward implementation of the 2010 Governance and Quota Reforms. It updates the status of consents to the proposed quota increases under the 14th General Review of Quotas and of acceptances of the Proposed Seventh Amendment on the Reform of the Executive Board (“Board Reform Amendment” or “Seventh Amendment”) as set out in the Board of Governors Resolution No. 66-2.