Policy Papers
2015
September 24, 2015
Safeguards Assessments Policy - External Expert Panel's Advisory Report
Description: This report by the external expert panel (“the panel”) examines the effectiveness and appropriateness of the safeguards assessments policy in the five years since its last review in 2010. In addition to expressing an opinion on the effectiveness and appropriateness of the safeguards assessment policy, the panel also makes recommendations to the Executive Board for its consideration to improve and optimize the benefits to be garnered from the safeguards assessment policy. The panel’s opinion is based on (i) consultations with key stakeholders, including central bank authorities, IMF Executive Directors’ offices, Fund and World Bank staff; (ii) examination of safeguards assessment and other Fund-specific documents; and (iii) study of international reference materials.
September 23, 2015
Safeguards Assessments - Review of Experience
Description: This paper reviews experience with the safeguards assessment policy since the last review in 2010. The policy is subject to periodic reviews by the Executive Board. The policy’s main objective is to mitigate risks of misuse of Fund resources and misreporting of monetary data under Fund arrangements. Consistent with past reviews, an external panel of experts provided an independent perspective on the implementation of the policy.
September 18, 2015
Implementation Plan in Response to the Board-Endorsed Recommendations for the IEO Evaluation of IMF Forecasts - Process, Quality, and Country Perspective
Description:
This paper sets out Management’s response to the Independent Evaluation Office’s (IEO) evaluation of IMF Forecasts: Process, Quality, and Country Perspectives.
The implementation plan proposes specific actions to address the five recommendations that received broad support from the Executive Board, namely
(i) maintaining the practice of commissioning external evaluations of IMF forecasts,
(ii) enhancing the processes and incentives for learning from past forecast performance,
(iii) extending guidance to desk economists on forecasting methodologies,
(iv) publishing a description of the WEO forecasting process, and
(iv) improving the public availability of data related to forecasts and outturns.
Several of the proposed actions to address the Board-endorsed IEO recommendations have already been implemented following the Board discussion, while the implementation of some other actions is underway. This paper also explains how implementation will be monitored.
September 18, 2015
Implementation Plan in Response to the Board-Endorsed Recommendations for the IEO Evaluation of Recurring Issues from a Decade of Evaluation—Lessons for the IMF
Description:
This paper sets out Management’s response to the Independent Evaluation Office’s (IEO) evaluation of Recurring Issues from a Decade of Evaluation: Lessons for the IMF.
The implementation plan proposes specific actions to address the recommendation supported by the Executive Board, namely preparing a high-level status report to monitor the progress the IMF has made in addressing recurring issues within two years, possibly followed by similar reports every five years thereafter.
September 18, 2015
Progress Report on Inclusion of Enhanced Contractual Provisions in International Sovereign Bond Contracts
Description: As part of the Fund’s ongoing work on sovereign debt restructuring, in October 2014 the Executive Board endorsed the inclusion of key features of enhanced pari passu provisions and collective action clauses (CACs) in new international sovereign bonds.1 Specifically, the Executive Board endorsed the use of: (i) a modified pari passu clause that explicitly excludes the obligation to effect ratable payments and (ii) an enhanced CAC with a menu of voting procedures, including a “single-limb” voting procedure that enables bonds to be restructured on the basis of a single vote across all affected instruments, a two-limb aggregated voting procedure and a series-by-series voting procedure.
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.