In the context of strengthening the international monetary and financial system, at the behest of the Interim Committee (the predecessor of the International Monetary and Financial Committee), the Fund, in cooperation with the Bank for International Settlements, and in consultation with a representative group of central banks, financial agencies, other relevant international and regional organizations, and selected academic experts, developed a code of transparency practices for monetary and financial policies. On September 26, 1999, the Interim Committee adopted the Code of Good Practices on Transparency in Monetary and Financial Policies: Declaration of Principles as a guide for members to increase transparency in the conduct of these policies. The Committee, in its Communiqué of September 26, 1999, urged "all members to implement the new Code."

The design of the good transparency practices in the Code rests on two principles. First, monetary and financial policies can be made more effective if the public knows the goals and instruments of policy and if the authorities make a credible commitment to meeting them. Second, good governance calls for central banks and financial agencies to be accountable, particularly where the monetary and financial authorities are granted a high degree of autonomy.

The Code contains a listing of broad principles related to transparency for monetary and financial policies that central banks and financial agencies should seek to achieve. As a guide to their implementation, the IMF staff, in cooperation with relevant international organizations and in close consultation with officials from central banks and financial agencies from the Fund membership, has prepared a supporting document to the Code. The Fund's Executive Board approved the Supporting Document to the Code of Good Practices on Transparency in Monetary and Financial Policies on July 24, 2000. The Supporting Document provides a fuller description of each of the transparency practices of the Code, the rationale of the practices in the context of transparency, examples of how the transparency practices are applied by central banks and financial agencies (including alternative ways to achieve the objective), and some considerations in implementation.

The Code covers two sets of policies and institutions—monetary policies/central banks and financial policies/financial agencies. To facilitate its use, the Supporting Document is divided into three parts— Part 1, Introduction and reference material (including references to professional literature and official documents that deal with transparency and accountability and a glossary of key terms used in the document), Part 2, Good Transparency Practices for Monetary Policies by Central Banks, and Part 3, Good Transparency Practices for Financial Policies by Financial Agencies.

Comments welcome.