Policy Papers

March 16, 2011

Demand Projections for the Fund's Concessional Resources

Description: Projections of demand for concessional loans under the Poverty Reduction and Growth Trust (PRGT) are subject to a high degree of uncertainty. The Fund’s financial support to low-income countries (LICs) is both cyclical and lumpy. Moreover, there are important structural changes underway that are likely to affect the frequency, nature, and size of Fund concessional lending. As a result, simple extrapolations from historical lending volumes are misleading. This paper reviews factors underlying historical lending trends and develops a methodology that can narrow down the range of possible longer-term demand scenarios.

March 14, 2011

Macroprudential Policy - An Organizing Framework - Background Paper

Description: MCM conducted a survey in December 2010 to take stock of international experiences with financial stability and the evolving macroprudential policy framework. The survey was designed to seek information in three broad areas: the institutional setup for macroprudential policy, the analytical approach to systemic risk monitoring, and the macroprudential policy toolkit. The survey was sent to 63 countries and the European Central Bank (ECB), including all countries in the G-20 and those subject to mandatory Financial Sector Assessment Programs (FSAPs). The target list is designed to cover a broad range of jurisdictions in all regions, but more weight is given to economies that are systemically important (see Annex for details). The response rate is 80 percent. This note provides a summary of the survey’s main findings.

March 14, 2011

Macroprudential Policy - An Organizing Framework

Description: Macroprudential policy is a complement to microprudential policy and it interacts with other types of public policy that have an impact on systemic financial stability. Indeed, prudential regulation, as carried out in the past, also had some macroprudential aspects, and the recent crisis has reinforced this focus; hence, a clear separation between “micro” and “macro” prudential, if useful conceptually, is difficult to delineate in practice. Moreover, no matter how different policy mandates are structured, financial stability tends to be a common responsibility, reflecting the far reaching consequences of financial crises. This calls for coordination across policies, to ensure that systemic risk is comprehensively addressed. Equally important, macroprudential policy is no substitute for sound policies more broadly, including, in particular, strong prudential regulation and supervision, and sound macroeconomic policies. Operational independence in other policy areas, including monetary and microprudential policy, should not be undermined in the name of macroprudential policy. Finally, given the global nature of the financial system, the multilateral aspects of macroprudential policy will need to be fully considered—an important aspect that is only touched upon in this paper.

March 11, 2011

Fourth Periodic Monitoring Report on the Status of Implementation Plans in Response to Board-Endorsed IEO Recommendations

Description: Periodic Monitoring Reports (PMRs) update the status on Management Implementation Plans (MIPs) in response to IEO recommendations endorsed by the Executive Board. The third PMR, which was discussed by the Board Evaluation Committee (EVC) in December 2009, concluded that all key performance benchmarks related to the MIPs covered in that report had either been met or were on track for timely completion, that no new remedial actions were proposed, and that there were no outstanding performance benchmarks to be reviewed in the next PMR. In their assessment to the Executive Board, the EVC did, however, ask for follow up in future PMRs on two specific issues—the Monitoring of Fund Arrangements (MONA) database and staff mobility. Therefore, this fourth report updates work on these two outstanding issues and informs on other progress since the third one through end-2010, namely on the Implementation Plan in response to Board-endorsed recommendations arising from the IEO Evaluation of IMF Involvement in International Trade Policy Issues.

March 10, 2011

Borrowing Agreement with Banca d'Italia

Description: In light of the multilateral effort to ensure the adequacy of the financial resources available to the International Monetary Fund (the "Fund"), and with a view to supporting the Fund's ability to provide timely and effective balance of payments assistance to its members, Banca d’Italia agrees to lend to the Fund an SDR-denominated amount up to the equivalent of EUR 8.11 billion, on the terms and conditions set out below...

March 10, 2011

Managing Volatility - A Vulnerability Exercise for Low-Income Countries

Description: This paper, introduces the analytical framework for a Vulnerability Exercise for Low-Income Countries (VE-LIC). The envisaged exercise will strive to identify vulnerabilities and emerging risks that arise from changes in the external environment in a consistent manner across countries and across time. The objective is to strengthen the staff’s capacity to spot vulnerabilities and flag potential pressure points in LICs arising from external triggers before they materialize.

March 9, 2011

Kyrgyz Republic - Ex Post Assessment of Longer-Term Program Engagement

Description: This report reviews the Kyrgyz Republic’s economic performance under Fund-supported programs from early 2005 to mid-2010. Two Fund-supported programs are assessed: the March 2005 Poverty Reduction and Growth Facility (PRGF, which expired in May 2008), and the December 2008 Exogenous Shock Facility (ESF, which expired in June 2010). Earlier Fund-supported programs were discussed in the Kyrgyz Republic’s first Ex Post Assessment (EPA), which was completed in November 2004. The assessment does not cover performance under the Rapid Credit Facility (RCF), which was approved by the Executive Board on September 15, 2010.


Also available in Russian

March 8, 2011

Revenue Mobilization in Developing Countries

Description: The Fund has long played a lead role in supporting developing countries’ efforts to improve their revenue mobilization. This paper draws on that experience to review issues and good practice, and to assess prospects in this key area.

Notes: Also available in Arabic | French | Russian, and Spanish.

March 8, 2011

Framework Administered Account for Selected Fund Activities - Pacific Financial Technical Assistance Center (PFTAC) 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 under the SFA. This paper requests Executive Board approval to establish the Pacific Financial Technical Assistance Center (PFTAC) subaccount (the "Subaccount") under the terms of the SFA Instrument.

March 3, 2011

Amendment of the Instrument to Establish the SCA-1/Deferred Charges Administered Account - Extension of Termination Date

Description: To help fulfill its purposes, the International Monetary Fund (the “Fund”) has adopted this Instrument to establish the SCA-1/Deferred Charges Administered Account in accordance with Article V, Section 2(b) (the “Account”), which shall be governed and administered by the Fund in accordance with the terms and conditions of this Instrument.