This paper explains the primary aim behind the founding of the IMF. The IMF is a cooperative institution that 181 countries have voluntarily joined because they see the advantage of consulting with one another in this forum to maintain a stable system of buying and selling their currencies so that payments in foreign money can take place between countries smoothly and without delay. The IMF lends money to members having trouble meeting financial obligations to other members, but only on condition that they undertake economic reforms to eliminate these difficulties for their own good and that of the entire membership.
The author-a top decision maker at the IMF for two decades-first focuses on the system of quotas and voting power in the IMF and concludes that it calls for reforms to enhance equity among the membership. He then examines decision making in the Executive Board, with an emphasis on consensus building in a cooperative institution, and the record of political oversight of the international monetary system through the Interim Committee and its successor, the International Monetary and Financial Committee. In that context, the author also comments on the impact on IMF decision making of the activities of groups of members, and of the differing interests of major shareholders. Thereafter, he recalls the distinctive features of the financial crises of the 1990s and examines their evolving implications for IMF governance. The essay concludes with an appraisal of IMF governance.
This pamphlet describes the financial structure and operations of the IMF, as well as the sources of IMF financing, the policies associated with the use of IMF resources, the role of the IMF as trustee to various accounts that are administered by it, and the safeguards established for protecting the IMF's resources. Published in 1990. Extensively revised in 2001 (sixth edition).
This evaluation report assesses research produced at the IMF between 1999 and 2008, focusing on the relevance and utilization of research to member country authorities, IMF staff, and other stakeholders. The report also examines the technical quality and management of research and offers recommendations for enhancing the relevance of research, improving the technical quality of analytical work, promoting openness to alternative perspectives, and improving the management of research.
Technical assistance is one of the key services provided by the IMF to member countries—particularly lower income countries. It covers a wide set of activities, from technical assistance to support IMF policy advice to longer-term assistance to support countries’ institutional development. This evaluation report examines the relevance and effectiveness of IMF technical assistance, and derives recommendations for both IMF management and the Executive Board.
In light of the changing contours of the global economy, this paper provides an overview of the challenges facing the International Monetary System (IMS). It seeks to forge a common understanding of the challenges facing the IMS and its shortcomings, and to lay the basis for discussing a possible roadmap for further work on reform areas.
From the Foreword to the first issue: “Among the responsibilities of the International Monetary Fund, as set forth in the Articles of Agreement, is the obligation to fact as a center for the collection and exchange of information on monetary and financial problems,’ and thereby to facilitate ‘the preparation of studies designed to assist members in developing policies which further the purposes of the Fund.’ The publications of the Fund are one way in which this responsibility is discharged. “Through the publication of Staff Papers, the Fund is making available some of the work of members of its staff. The Fund believes that these papers will be found helpful by government officials, by professional economists, and by others concerned with monetary and financial problems. Much of what is now presented is quite provisional. On some international monetary problems, final and definitive views are scarcely to be expected in the near future, and several alternative, or even conflicting, approaches may profitably be explored. The views presented in these papers are not, therefore, to be interpreted as necessarily indicating the position of the Executive Board or of the officials of the Fund.”
This volume is the Fortieth Issue of Selected Decisions and Selected Documents of the IMF. It includes decisions, interpretations, and resolutions of the Executive Board and the Board of Governors of the IMF, as well as selected documents, to which frequent reference is made in the current activities of the IMF. In addition, it includes certain documents relating to the IMF, the United Nations, and other international organizations. As with other recent issues, the number of decisions in force continues to increase, with the decision format tending to be longer given the use of summings up in lieu of formal decisions. Accordingly, it has become necessary to delete certain decisions that were included in earlier issues, that is, those that only completed or called for reviews of decisions, those that lapsed, and those that were superseded by more recent decisions. Wherever reference is made in these decisions and documents to a provision of the IMF’s Articles of Agreement or Rules and Regulations that has subsequently been renumbered by, or because of, the Second Amendment of the Fund’s Articles of Agreement (effective April 1, 1978), the corresponding provision currently in effect is cited in a footnote.
International Monetary Fund Managing Director Christine Lagarde delivered this speech at the World Bank/IMF Annual Meetings in Washington, D.C., on October 10, 2014.
The framework guiding the IMF’s communications—established by the Executive Board in 2007—has enabled the institution to respond flexibly to the changing global context. The framework is based on four guiding principles: (i) deepening understanding and support for the Fund’s role and policies; (ii) better integrating communications into the IMF’s daily operations; (iii) raising the impact of new communications materials and technologies; and (iv) rebalancing outreach efforts to take account of different audiences. In addition, greater emphasis has been placed on strengthening internal communications to help ensure institutional coherence in the Fund’s outreach activities. Continued efforts are needed to strengthen communications going forward. Several issues deserve particular attention. First, taking further steps to ensure clarity and consistency in communication in a world where demand for Fund services continues to rise. Second, doing more to assess the impact of IMF communications and thus better inform efforts going forward. Third, engaging strategically and prudently with new media—including social media.
This progress report presents the key conclusions and recommendations of the IEO evaluation of data and statistics at the IMF that was discussed by the Executive Board on March 17, 2016. It also summarizes the IMF's plan, approved by the Board in December 2015, for implementing the recommendations from the IEO evaluation of the IMF Response to the Financial and Economic Crisis and describes the IEO’s ongoing work.
This paper focuses on the relation of inflation to economic development. Due to the inadequacy of savings and the difficulty of directing them into productive investment, there is a strong temptation to raise the level of investment by expanding bank credit—that is, by inflation. In most low-income countries, even the most forceful measures for increasing savings and for applying them to the most urgent needs would still leave the economy with inadequate resources for the investment necessary to assure tolerable progress in raising productive efficiency and expanding production. The only way of securing adequate resources for development in such countries is by supplementing domestic savings with capital from abroad. It is characteristic of the underdeveloped countries that the resources they put into investment are generally a smaller proportion of their very much smaller national product than is true for the more highly developed countries. The proportionally low level of investment in underdeveloped countries may be due to various factors. Frequently, though not universally, the cause of inadequate investment is the unavailability of savings.
Following the companion paper on the new policy challenges related to the adoption of digital forms of money, this paper presents an operational strategy for the IMF to continue delivering on its mandate of ensuring domestic and international financial and economic stability. The paper begins by summarizing the forces driving the adoption of digital forms of money, and the new policy questions that emerge. It then focusses on how the IMF’s core activities and output will need to evolve, including surveillance, capacity development, and analytical foundations. It ends by discusses how the IMF intends to partner with other organization, and to grow and structure internal resources to fulfill this vision.
This paper comprises documents relating to the history of the IMF, including some that preceded the drafting of the Articles of Agreement. The paper highlights that the first draft of Lord Keynes’ plan for a Clearing Union was circulated within the British Treasury on September 8, 1941. A fourth draft was given to Ministers on February 11, 1942. The first definitive version of Mr. White’s plan for a stabilization fund was a mimeographed draft dated April 1942. This covered both the IMF and the World Bank.
Rapid technological innovation is ushering in a new era of public and private digital money, bringing about major benefits in terms of efficiency and inclusion. To reap the full benefits and manage risks, authorities around the world will have to address new policy challenges. These are widespread, complex, rapidly evolving, and have profound implications. This paper identifies the main challenges currently arising regarding consumer protection and financial integrity, domestic financial and economic stability, as well as the stability and efficiency of the international monetary system. The paper argues that many of these challenges intersect the Fund’s mandate. The Fund must therefore monitor, and advise on, this rapid and complex transition for all members. The paper ends with a broad vision of how to deliver on this mandate and serve its members, including by enhancing resources, and collaborating closely with other institutions. This is the first of two papers, the second of which lays out a more detailed operational strategy.
Good governance is important for countries at all stages of development... Our approach is to concentrate on those aspects of good governance that are most closely related to our surveillance over macroeconomic policies- namely, the transparency of government accounts, the effectiveness of public resource management, and the stability and transparency of the economic and regulatory environment for privalte sector activity. Michael Camdessus, IMF Managing Director
This chapter presents policy statement on IMF technical assistance (TA) programs. The TA programs provide a cooperative framework for the sharing of knowledge and international experience, in a lasting manner, with member countries. The IMF seeks to provide technical assistance as efficiently and effectively as possible in its core substantive areas of competency namely macroeconomic policy formulation and management among others. Technical assistance is provided in a variety of forms. These include IMF staff missions from headquarters; the placement of experts for periods ranging from a few months to a few years. Technical assistance is provided only when requested by a country's authorities. Since the demand for such assistance normally exceeds the resources available from the IMF, a number of considerations are considered in prioritizing country requests. The IMF encourages member countries who have not yet done so to consider providing such complementary financial support to enhance the resources available for technical assistance, preferably in a manner that is as unrestricted as possible.
This is the final issue for 2006 (Volume 53), and contains another paper in the occasional Special Data Section that seeks to measure financial development in the Middle East and North Africa by utilizing a new database. The issue also contains a comment from Jacques J. Polak on parity reversion in real exchange rates.
This paper examines the effect transactions with the IMF have on the monetary situation within a country when the foreign exchange purchased from the IMF is used to meet a balance of payments deficit. In some countries, the national currency counterpart is kept on deposit to the credit of the IMF at the central bank. In other countries, the government substitutes a noninterest-bearing note for the national currency counterpart of a transaction with the IMF. It is with the effects of the latter practice that this paper is primarily concerned. The effect of a balance of payments deficit on the money supply will be offset if credit is expanded to finance a government deficit, investment by business, or spending by consumers. The ultimate effect on the money supply will depend upon how the government deals with the national currency turned over to it by the Exchange Equalization Account. Considerable caution is required in concluding that a balance of payments deficit is likely to be moderate and temporary.
This independent evaluation of the IMF’s role and performance in the determination and use of aid to low-income countries in sub-Saharan Africa is presented at a ground-level view. Country performance has improved in many sub-Saharan Africa countries over the period, and the report details the role of the IMF’s programs, as well as perceptions of that role. The report is an important contribution to following through on the IMF’s commitment to its Poverty Reduction Strategy and makes three main recommendations for improving the coherence—actual and perceived—of the IMF’s policies and actions relating to aid to sub-Saharan Africa going forward.
Seven years after the onset of the global financial crisis, the world still has a way to go to secure a sustainable recovery marked by strong growth that supports rapid job creation and benefits all, International Monetary Fund (IMF) Managing Director Christine Lagarde says in her foreword to the institution’s Annual Report 2014—From Stabilization to Sustainable Growth, published today. “The recovery is ongoing, but it is still too slow and fragile, subject to the vagaries of financial sentiment. Millions of people are still looking for work. The level of uncertainty might be diminishing, but it is certainly not disappearing.” Ms. Lagarde said that “throughout the crisis and in the recovery period, the IMF has been, and continues to be, an indispensible agent of economic cooperation” for its membership. The report covers the work of the IMF’s Executive Board and contains financial statements for the year May 1, 2013, to April 30, 2014. It describes the IMF’s support for its 188 member countries, with an emphasis on the core areas of IMF responsibility: assessing their economic and financial policies, providing financing where needed, and building capacity in key areas of economic policy.
The author-a top decision maker at the IMF for two decades-first focuses on the system of quotas and voting power in the IMF and concludes that it calls for reforms to enhance equity among the membership. He then examines decision making in the Executive Board, with an emphasis on consensus building in a cooperative institution, and the record of political oversight of the international monetary system through the Interim Committee and its successor, the International Monetary and Financial Committee. In that context, the author also comments on the impact on IMF decision making of the activities of groups of members, and of the differing interests of major shareholders. Thereafter, he recalls the distinctive features of the financial crises of the 1990s and examines their evolving implications for IMF governance. The essay concludes with an appraisal of IMF governance.
This paper constructs three simple model of the financial effects on countries in different situations of the various arrangements regarding reserve supply that were discussed during the recent negotiations on reform of the international monetary system. Much of the analysis is devoted to an identification of the conflicting factors that determine the financial impact on a country of the possible arrangements considered. It is demonstrated that nonreserve centers have a financial interest in the existence of convertibility and in the absence of holding limits for primary assets, while the converse is true for a reserve center. Another clear-cut conclusion is that net users of special drawing rights (SDR) have a financial interest in increasing the role of the SDR by means of restrictions on reserve composition rather than by means of an increased SDR yield, while the reverse is true of countries with SDR holdings in excess of allocations.
The IMF's 2012 Annual Report chronicles the response of the Fund's Executive Board and staff to the global financial crisis and other events during financial year 2012, which covers the period from May 1, 2011, through April 30, 2012. The print version of the Report is available in eight languages (Arabic, Chinese, English, French, German, Japanese, Russian, and Spanish), along with a CD-ROM (available in English only) that includes the Report text and ancillary materials, including the Fund's Financial Statements for FY2012.
This issue of Annual Report discusses that the global economy is at a delicate moment. The expansion of early 2018 has lost momentum, in large part in response to rising trade tensions. There are threats from rising financial vulnerabilities and geopolitical uncertainties. These challenges call for policymakers to avoid missteps and to take the right policy steps: at home, across borders, and globally. In addition to several major reviews looking at IMF conditionality, economic and financial surveillance, and lending facilities, the management has deepened its analysis on trade spillovers and financial stability and are revamping frameworks for debt sustainability assessment in low-income and market access countries. Building on earlier research that showed how trade can boost incomes and living standards by enabling the flow of technology across countries, the October 2018 World Economic Outlook provided illustrative scenarios of the potential impact of escalating trade tensions between the United States and China.
This independent evaluation of the IMF’s role and performance in the determination and use of aid to low-income countries in sub-Saharan Africa is presented at a ground-level view. Country performance has improved in many sub-Saharan Africa countries over the period, and the report details the role of the IMF’s programs, as well as perceptions of that role. The report is an important contribution to following through on the IMF’s commitment to its Poverty Reduction Strategy and makes three main recommendations for improving the coherence—actual and perceived—of the IMF’s policies and actions relating to aid to sub-Saharan Africa going forward.
This Note provides guidance for staff on the treatment and use of allocations of Special Drawing Rights (SDRs). It presents a consistent framework for IMF country teams to assess the macroeconomic implications of the SDR allocation at the country level, covering the following areas: • Statistical and accounting treatment. • General macroeconomic implications and advice. • Debt sustainability analysis. • Transparency and accountability. • Reserve management. • Implications for Fund-supported programs.
This 2001 Annual Report reviews economic developments in the world during FY2000. Output growth in emerging Asia picked up in 2000 as this region continued its recovery from the 1997–98 crisis. The pace of economic expansion, however, slowed from mid-2000, largely as a result of the U.S. slowdown, higher oil prices, a decline in regional equity markets, and, in some countries, concerns about delays of corporate and financial restructuring and a decline in electronics exports. The financial year 2001 saw the IMF actively engaged in the process of reform.
This paper outlines strategic priorities for the IMF’s financial surveillance in the coming years. It complements recent discussions on the work agenda in this area. It takes stock of innovations and gaps in financial surveillance by the Fund during the past decade, including in the wake of the current global financial crisis. It proposes concrete and prioritized steps to further strengthen financial surveillance so that the Fund can fulfill its mandate to ensure the effective operation of the international monetary system and support global economic and financial stability.
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