Policy Papers
2012
April 16, 2012
Enhancing Financial Sector Surveillance in Low-Income Countries - Financial Deepening and Macro-Stability
Description: This paper aims to widen the lens through which surveillance is conducted in LICs, to better account for the interplay between financial deepening and macro-financial stability as called for in the 2011 Triennial Surveillance Review. Reflecting the inherent risk-return tradeoffs associated with financial deepening, the paper seeks to shed light on the policy and institutional impediments in LICs that have a bearing on the effectiveness of macroeconomic policies, macro-financial stability, and growth. The paper focuses attention on the role of enabling policies in facilitating sustainable financial deepening. In framing the discussion, the paper draws on a range of conceptual and analytical tools, empirical analyses, and case studies.
April 16, 2012
Enhancing Financial Sector Surveillance in Low-Income Countries - Background Paper
Description:
This note provides an overview of the literature on the challenges posed by shallow financial systems for macroeconomic policy implementation. Countries with shallow markets are more likely to choose fixed exchange rates, less likely to use indirect measures as instruments of monetary policy, and to implement effective counter-cyclical fiscal policies. But causation appears to work in both directions, as policy stances can themselves affect financial development. Drawing on recent FSAP reports, the note also shows that shallow financial markets tend to increase foreign exchange, liquidity management, and concentration risks, posing risks for financial stability
Also available in French
April 16, 2012
Enhancing Financial Sector Surveillance in Low-Income Countries - Case Studies
Description:
This supplement presents ten case studies, which highlight the roles of targeted policies to facilitate sustainable financial deepening in a variety of country circumstances, reflecting historical experiences that parallel a range of markets in LICs. The case studies were selected to broadly capture efforts by countries to increase reach (e.g., financial inclusion), depth (e.g., financial intermediation), and breadth of financial systems (e.g., capital market, cross-border development). The analysis in the case studies highlights the importance of a balanced approach to financial deepening. A stable macroeconomic environment is vital to instill consumer, institutional, and investor confidence necessary to encourage financial market activity. Targeted public policy initiatives (e.g., collateral, payment systems development) can be helpful in removing impediments and creating infrastructure for improved market operations, while ensuring appropriate oversight and regulation of financial markets, to address potential sources of instability and market failures.
Also available in French
April 13, 2012
Provisional Agenda for the Twenty-Fifth Meeting of the International Monetary and Financial Committee
Description: The following is the provisional agenda for the Twenty-Fifth Meeting of the International Monetary and Financial Committee, which is to be convened at the IMF's Headquarters in Washington, D.C. on April 21, 2012.
April 12, 2012
The Consolidated Medium-Term Income and Expenditure Framework
Description: This paper updates the consolidated income and expenditure outlook and the projected accumulation of precautionary balances over the medium-term. The paper incorporates and extends the income and budget projections in the companion papers; these projections are also in line with those discussed in the recent paper on the review of precautionary balances.
April 12, 2012
Review of the Fund's Income Position for FY 2012 and FY 2013-14
Description:
This paper reviews the Fund’s income position for FY 2012 and FY 2013‒14.1 The paper updates projections provided at the FY 2012 midyear review and proposes decisions for the current and next two financial years. These decisions include setting the margin for the rate of charge under the new Rule I-6(4) that the Executive Board adopted in December 2011.2 The new rule is based on principles endorsed by the Executive Board in April 2008 and that have guided decisions on setting the margin since FY 2009.
Section II reviews the FY 2012 income position and main changes from the midyear projections; Section III makes proposals on the disposition of net income, and placement to reserves; Section IV discusses the margin on the rate of charge for FY 2013‒14, the income outlook for that period, and projected burden sharing adjustments; and Section V reviews special charges.
April 10, 2012
The IMF’s Financial Surveillance Work Agenda
Description:
The Fund has the responsibility to ensure the effective operation of the international monetary system, thereby promoting economic and financial stability and growth. The recent crisis was a reminder that these goals are best served by Fund surveillance that seeks to ensure that members’ financial systems are properly regulated and supervised, and maintain the right balance between dynamism and stability.
The recent Triennial Surveillance Review (TSR) called for a report on the key elements of the Fund’s strategy in this area. This call was particularly timely in view of the profound changes in the international financial landscape and policy agenda since the crisis, notably the significant multilateral commitments to financial reform and the emergence of important new global actors, such as the G-20 and the Financial Stability Board (FSB).
This paper represents a stocktaking and statement of the Fund’s current financial surveillance work agenda and priorities, in order to solicit input from the IMFC and other stakeholders in preparing such a strategy. It is intended, moreover, to provide a basis for the Fund to cooperate with and contribute to the work of other global actors, building on the Fund’s broader mandate and membership and leveraging its comparative advantages.
March 29, 2012
FY2013-FY2015 Medium-Term Budget
Description:
The FY 13–15 Medium-Term Budget presented in this paper reflects the following main features:
Unchanged administrative budget in real terms for FY 13. Overall spending (structural plus crisis/temporary) will be kept unchanged in real terms in FY 13 relative to the FY 12 budget (excluding the one-off additional cost of the 2012 Annual Meetings in Tokyo).
Broadly unchanged administrative envelope in nominal terms for FY 13. This reflects the impact of the Executive Board’s decision in March to grant no increase in the staff salary structure in the context of the 2012 Compensation Review. The “structure increase” is the main component in the budget deflator applied to map the real total envelope into nominal terms.
A capital budget dominated by the impact of the HQ1 Renewal Program. The final appropriation for this project, approved by the Executive Board in March 2011, is reflected in the proposed capital budget for FY 13.
March 21, 2012
Handbook of IMF Facilities for Low-Income Countries
Description: The Fund’s concessional facilities are aimed at providing flexible and tailored support to low-income countries (LICs) in their efforts to achieve, maintain, or restore a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth.
March 20, 2012
Framework Administered Account for Selected Fund Activities - International Forum Sovereign Wealth Funds 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 a subaccount within the SFA. This paper requests Executive Board approval to establish the International Forum of Sovereign Wealth Funds Subaccount (the "Subaccount") under the terms of the SFA Instrument.