News Brief No. 99/73

News Brief: The Work Program of the IMF's Executive Board

October 28, 1999

The International Monetary Fund (IMF) today releases a summary of the work program of its Executive Board for the next few months as part of its continuing efforts to increase public awareness of the IMF's activities. (This is the second such summary of the work program; the first was released on July 2, 1999—see News Brief No. 99/38.)

The work program is a road map for the work of the IMF's Executive Board, which consists of the 24 officials appointed or elected by the IMF's 182 member countries, and the Managing Director as Chairman. The Board meets regularly to assess economic developments at the national, regional and global levels; to discuss and decide on the IMF's loans to member countries; and to consider general policy issues concerning the international financial system.

"The release of the work program summary continues the work of enhancing the transparency of the IMF's operations, and sheds light, in particular, on the important role of the Executive Board," said Thomas C. Dawson, Director of the IMF's External Relations Department. The work program is prepared in the light of discussions each spring and fall at the IMF's International Monetary and Financial Committee (IMFC), the ministerial body that advises on the activities of the IMF (formerly called the Interim Committee). The current work program looks ahead to the spring meeting of the IMFC—scheduled for April 16, 2000—and beyond.

Key Elements of the Work Program

The Board's agenda in the period ahead covers many issues. Priorities for this period include finalizing decisions on enhancement of the HIPC Initiative for heavily indebted poor countries; carrying forward work on strengthening the international monetary and financial systems; and undertaking the biennial review of IMF surveillance activities with regard to members' exchange rate and other macroeconomic policies. Much of the Board's time will continue to be devoted to the Fund's regular work on global surveillance and on country items, including discussions on Article IV country consultations and lending to support members' policy programs.

HIPC Initiative and Poverty Reduction

The Board aims to give effect as rapidly as possible to the initiatives endorsed by the Interim Committee at its last meeting on September 26, 1999, including the decision to transform the ESAF into the Poverty Reduction and Growth Facility (PRGF—see Press Release No. 99/46, Communiqué of the Interim Committee). The Board will consider the steps necessary, including off-market gold transactions, to finance the Fund's participation in the enhanced HIPC Initiative and the continuation of concessional lending for poverty reduction and growth in low income countries under the PRGF. It will also finalize decisions on the operation of the new facility, on Poverty Reduction Strategy Papers, and review progress in implementing the HIPC Initiative.

Strengthening the International Monetary and Financial System

The Executive Board's work on these so-called architecture issues mainly falls into three areas: standards related to the operation of the international monetary and financial system; involving the private sector in preventing and resolving financial crises; and capital account issues and exchange rate regimes.

In the area of standards, the Board will, among other things, assess experience so far with the pilot exercise on the Financial Sector Assessment Program; assess experience with the implementation of the Basel Core Principles of Effective Banking Supervision; and carry out a review of data standards, covering issues related to the IMF's Special Data Dissemination Standard and the General Data Dissemination System.

Concerning the involvement of the private sector in crisis prevention and resolution, the Interim Committee requested the Board to build on the framework reflected in the G-7 Finance Ministers' report to the Köln Summit. The Board will review the experience in securing private sector involvement in recent cases, with a view to establishing some general guidelines regarding the respective roles of the private sector, and multilateral and bilateral institutions in a financial crisis.

The Interim Committee welcomed the Fund's recent work on the pace and sequencing of capital account opening and encouraged further examination of individual countries' use and liberalization of controls, with particular attention to the relationship between capital account liberalization and financial sector stability. Following the Spring Meetings, the Executive Board will discuss liberalization strategies and the scope and sequencing of financial reforms and prudential policies to safeguard financial stability in the course of capital account opening. The Board will continue its discussion of exchange rate regimes in an increasingly integrated world economy.

Biennial Review of Surveillance

The biennial review of IMF surveillance will cover the scope and focus of bilateral surveillance and a series of issues in the conduct of surveillance, including: reviews of recent experience with regard to Fund policy advice on exchange rates; regional and cross-country issues; standards; the coverage of financial sector and capital account issues; and consultation procedures and practices. The biennial review will also follow up on some of the key issues raised by this year's external evaluation of Fund surveillance.

Other Elements of the Work Program

Among the other topics that the Executive Board will consider in the next 12 months are:

• The Spring and Fall 2000 World Economic Outlook, and the 2000 International Capital Markets Report;

• Structural issues in managing foreign exchange reserves, in light of the Interim Committee's call on the IMF to identify ways to strengthen safeguards on the use of its funds, and to report at its next meeting; and the related topic of misreporting information to the IMF;

• A review of the application of recent initiatives to enhance the Fund's transparency, with regard to both its surveillance function and the use of Fund resources;

• Monetary and exchange rate policies of the Euro area, in the context of IMF surveillance;

• Various aspects of IMF technical assistance, including the substance of policy advice and arrangements for its delivery;

• Various aspects of the Fund's conditionality, particularly in light of recent crisis cases.