Policy Papers
2014
June 11, 2014
Statement by the Managing Director on the Independent Evaluation Office Report on Recurring Issues from a Decade of Evaluation: Lessons for the IMF
Description: The Managing Director welcomes the IEO's novel report, which identifies recurring issues from past evaluations and assesses progress in addressing them. The report's focus on organizational silos, attention to risks and uncertainty, country and institutional context, evenhandedness, and Executive Board guidance and oversight is appropriate given their relevance and importance for the effectiveness and credibility of IMF operations.
June 3, 2014
Proposed New Grouping in WEO Country Classifications: Low-Income Developing Countries
Description: This note develops a definition of a new category of countries (Low Income Developing Countries (acronym: LIDCs)) that can be deployed to (a) facilitate enhanced coverage of low income country issues in the Fund’s flagship products and (b) serve as a standardized definition of the “low income country” universe in staff analytical work.1 While use of the proposed definition in analytical work would be encouraged, it would not be required.
June 2, 2014
Cross-Border Bank Resolution - Recent Developments
Description: Developing an effective framework for cross-border resolution is a key priority in international regulatory reform. Large bank failures during the global financial crisis brought home the lack of adequate tools for resolving “too-big-to-fail” institutions. In cross-border cases, misaligned incentives and lack of robust mechanisms for resolution and cross-border cooperation left some country authorities with little choice but to take unilateral actions, which contributed to the high fiscal costs of the crisis and resulted in disorderly resolution in some cases.
May 30, 2014
Statement by the Managing Director on the Work Program of the Executive Board - Executive Board Meeting - June 11, 2014
Description: The Global Policy Agenda (GPA) presented to the IMFC in April 2014 identified a range of actions needed to transform the modest, uneven, and fragile recovery into more rapid, balanced, and sustainable growth. These actions included policies to manage monetary normalization and the associated policy spillovers and spillbacks; reforms to ensure robust growth while reducing vulnerabilities; and steps to facilitate external rebalancing. The GPA also outlined how the Fund would support the membership through assessments and policy advice provided in bilateral and multilateral surveillance, capacity building, and financial support.
May 23, 2014
The Fund’s Lending Framework and Sovereign Debt - Preliminary Considerations
Description: As a follow-up to the Executive Board's May 2013 discussion, this paper considers a possible direction for reform of the Fund's lending framework in the context of sovereign debt vulnerabilities. The primary focus of this paper relates to the Fund's exceptional access framework, since it is in this context that the Fund will most likely have to make the difficult judgment as to whether the member's problems can be resolved with or without a debt restructuring. The objective of the preliminary approaches set forth in this paper is to reduce the costs of crisis resolution for both creditors and debtors—relative to the alternatives—thereby benefitting the overall system. These ideas are market-based and their eventual implementation would require meaningful consultation with creditors.
May 9, 2014
Spillovers in International Corporate Taxation
Description: This paper explores the nature, significance and policy implications of spillovers in international corporate taxation—the effects of one country’s rules and practices on others. It complements current initiatives focused on tax avoidance by multinationals, notably the G20-OECD project on Base Erosion and Profit shifting (BEPS). The paper draws on the IMF’s experience on international tax issues with its wide membership, including through technical assistance (TA), and on its previous analytical work, to analyze spillovers and how they might be addressed. In doing so, it goes beyond current initiatives to look at a wide set of possible responses.
May 8, 2014
Proposed Modification of the Policy on Provision of Consulting Services by the External Audit Firm
Description:
At an informal Board meeting in January, there was broad support for removing the current blanket prohibition on the provision of non-audit-related consulting services by the Fund’s external audit firm and replacing it with a blacklist approach, subject to robust safeguards to ensure the independence of the external audit firm.
This paper makes specific proposals to implement such a change. This would align the Fund’s policy on the provision of consulting services by the external audit firm with practices followed in major jurisdictions and allow the external auditor to perform certain consulting services with proper safeguards to maintain the auditor’s independence. The proposed safeguards include: (i) a blacklist of prohibited services; (ii) an independence declaration by the external audit firm; (iii) limitations on the consulting fees that can be paid to the external audit firm; (iv) an oversight role for the External Audit Committee (EAC); and (v) review of consulting services provided by audit firms prior to the selection of a new external audit firm for the Fund.
The staff sought the views of the EAC, which concurs with the proposal to modify the policy on the provision of consulting services by the external audit firm along with the related safeguards.
May 1, 2014
Review of the Flexible Credit Line, the Precautionary and Liquidity Line, and the Rapid Financing Instrument - Specific Proposals - Revised Annex I
Description: This annex provides the key considerations for establishing the qualification framework to access financing under the FCL and PLL, with a view to promoting a predictable and evenhanded qualification process.