Policy Papers

February 1, 2014

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

Description: The following table lists the IMF members for which the Article IV consultation or the mandatory financial stability assessment has been delayed by more than 18 months. The delay is counted past the scheduled expected date, plus any applicable grace period.

January 28, 2014

Review of the Flexible Credit Line, the Precautionary and Liquidity Line, and the Rapid Financing Instrument

Description: This review of the Flexible Credit Line (FCL), the Precautionary and Liquidity Line (PLL), and the Rapid Financing Instrument (RFI) focuses on four key issues: (i) the demand for the FCL and PLL in the context of the broader role of the Fund’s lending (including precautionary) instruments in the global financial safety net (GFSN); (ii) the qualification/conditionality framework for the FCL and the PLL; (iii) concerns about repeated usage of FCL arrangements by the same members and consideration of ways to further improve the transparency in the discussion of access/exit in the underlying staff documents; and (iv) the lack of demand for the RFI.

January 28, 2014

Review of the Flexible Credit Line, the Precautionary and Liquidity Line, and the Rapid Financing Instrument - Supplementary Information

January 23, 2014

Fiscal Policy and Income Inequality

Description: Fiscal policy is the primary tool for governments to affect income distribution. Rising income inequality in advanced and developing economies has coincided with growing public support for income redistribution. This comes at a time when fiscal restraint is an important priority in many advanced and developing economies. In the context of the Fund’s mandate to promote growth and stability, this paper describes: (i) recent trends in the inequality of income, wealth, and opportunity in advanced and developing economies; (ii) country experience with different fiscal instruments for redistribution; (iii) options for the reform of expenditure and tax policies to help achieve distributive objectives in an efficient manner that is consistent with fiscal sustainability; and (iv) recent evidence on how fiscal policy measures can be designed to mitigate the impact of fiscal consolidation on inequality. This paper does not advocate any particular redistributive goal or policy instrument for fiscal redistribution.

January 22, 2014

Termination of the Emergency Post-Conflict and Natural Disaster Assistance Administered Subsidy Account

January 16, 2014

2010 Reforms and Fifteenth General Review of Quotas - Report of the Executive Board to the Board of Governors - Decision

Description: In completing the Fourteenth General Review of Quotas (hereafter the “Fourteenth Review”) and approving the Proposed Amendment on the Reform of the Executive Board (hereafter the “Board Reform Amendment”), the Board of Governors requested the Executive Board to bring forward the timetable for completion of the Fifteenth General Review of Quotas (hereafter the “Fifteenth Review”) to January 2014. The Executive Board was also requested to complete a comprehensive quota formula review by January 2013. These forward-looking elements were part of an agreed package of 2010 quota and governance reforms (hereafter the “2010 Reforms”). Each member committed to use its best efforts to complete the required steps for the effectiveness of the quota increases under the Fourteenth Review no later than the Annual Meetings in 2012

January 14, 2014

Review of the Adequacy of the Fund's Precautionary Balances

Description: This paper reviews the adequacy of the Fund’s precautionary balances, using the framework approved by the Board in 2010. The review takes place on a standard two year cycle. The paper discusses developments since the last review in 2012 and revisits several issues relating to the assessment of reserve adequacy that were discussed at that time.

December 23, 2013

Debt Limits in Fund Programs with Low-Income Countries

Description: This annotated presentation on the debt limits policy (DLP) for Fund programs with low income countries (LICs) was discussed at an informal session of the IMF Executive Board on January 10, 2014. The presentation contains a proposed new approach to the handling of external borrowing limits in such programs, building on the analysis contained in an earlier paper, discussed by the IMF Board in March 2013. The January 10 Board discussion provided staff with suggestions on how to refine their proposals, but the Board did not take a position on the merits of the proposed approach. IMF staff are to present a formal proposal to modify the IMF’s Debt Limits Policy (which covers all IMF lending programs, not merely those with low income countries) for consideration by the Fund’s Executive Board in the coming months.

November 27, 2013

Guidance Note on the Fund's Transparency Policy

Description: Provides guidance to staff on the implementation of the Fund’s Transparency Policy. The objectives of the policy include strengthening the Fund’s effectiveness by providing the public with access to Fund views and deliberations, thus informing public debate and building traction for the Fund’s advice, supporting the quality of surveillance and of programs, by subjecting the Fund to outside scrutiny, and enhancing the Fund’s legitimacy by making the institution more accountable. A Transparency Policy Decision (referred to in the remainder of this note as “the Decision”) sets out rules for the modification and publication of all Board documents. A number of changes to the Decision were adopted by the Executive Board on June 24, 2013 (See Box 1 and 2013 Review of the Fund’s Transparency Policy, May 14, 2013, Background Paper, May 14, 2013, and Supplementary Information and Revised Proposed Decisions, June 17, 2013).

Transparency at the IMF

November 18, 2013

Mandatory Financial Stability Assessments Under the Financial Sector Assessment Program - Update

Description: In September 2010, the Executive Board made financial stability assessments under the Financial Sector Assessment program (FSAP) a regular and mandatory part of bilateral surveillance under Article IV for jurisdictions with systemically important financial sectors. This decision recognized that although financial sector issues were at the core of the Fund’s surveillance mandate, the FSAP as designed in the late 1990s had severe limitations as a tool. Voluntary participation, the low frequency of assessments, and their very broad coverage (particularly in emerging market and developing countries, where assessments are typically conducted jointly with the World Bank) limited the usefulness of the FSAP for surveillance. Building on the revamp of the FSAP during the 2009 program review that delineated the institutional responsibilities of the Fund and the World Bank and defined the content of the stability assessment under the FSAP, the Executive Board took the next step in 2010 to make these stability assessments mandatory every five years for members with systemically important financial sectors.