Chaired by Dr. Youssef Boutros-Ghali, Minister of Finance
of Egypt, on October 9, 2010
Global economy. Economic recovery is
proceeding, but remains fragile and uneven across the membership. Faced with
this source of potential stress, we underscore our strong commitment to
continue working collaboratively to secure strong, sustainable, and balanced
growth and to refrain from policy actions that would detract from this
shared goal. Our priorities are to address remaining financial sector
fragilities; ensure strong growth in private sector demand and job creation;
secure sound public finances and debt sustainability; work toward a more
balanced pattern of global growth, recognizing the responsibilities of
surplus and deficit countries; and address the challenges of large and
volatile capital movements, which can be disruptive. The rejection of
protectionism in all its forms must remain a key element of our coordinated
response to the crisis; renewed efforts are urgently needed to bring the
Doha Round to a successful conclusion.
Financial sector reform. We welcome the recent
Basel agreement on a substantial improvement in the quality and quantity of
bank capital together with the introduction of a global liquidity standard
and a leverage ratio. We look forward to full, timely, and consistent
implementation across jurisdictions, which will improve financial sector
resilience. Further action is needed to enhance regulation, supervision,
cross-border resolution, and macro-prudential surveillance. Progress is also
needed to strengthen balance sheets and market infrastructure, and to reduce
risks from systemically important financial institutions and moral hazard,
while ensuring a level playing field. We call on the Fund to contribute to
this important agenda in collaboration with relevant bodies. We welcome the
IMF-FSB progress report on data gaps and encourage further efforts to follow
up on its recommendations.
Low-income countries (LICs). The resilience and
rapid recovery of many LICs is a positive development. The significant
reforms undertaken by these countries in recent years have cushioned their
economies during the crisis. Rebuilding policy space is a priority, along
with strengthening the capacity to invest efficiently and borrow sustainably
in order to meet their growth and development needs. We welcome members’
contributions for concessional lending and call for further such support,
including from new contributors. The international community needs to
redouble its efforts to achieve the MDGs by 2015, including by meeting aid
commitments.
IMF reform. We welcome the extensive and
ongoing work by the Fund on the review of its governance and mandate that we
had called for. The Fund has responded well in adapting to the membership’s
needs during the crisis. Further action is urgently needed to reinforce the
institution’s role and effectiveness as a global body for macro-financial
surveillance and policy collaboration.
• Quota and governance reforms. We reemphasize that quota and
governance reforms are critical to institutional legitimacy and
effectiveness. The Fund is and should remain a quota-based institution. We
urge members who have not consented to the 2008 quota and voice reform to do
so promptly. We have made progress toward finding common ground on the core
reform areas, and we are working actively to resolve outstanding issues.
These issues relate to the size of the quota increase and the quota shift,
in line with our October 2009 Istanbul communiqué; enhanced voice and
representation of emerging markets and developing countries at the IMF’s
Executive Board; modalities for protecting the voting share of the poorest
members; enhanced ministerial engagement and strategic oversight; and an
open, transparent, and merit-based process for selecting the heads of the
IMF and other IFIs. We call for progress in Board and management
accountability, Board effectiveness, and staff diversity. Given the urgency
of these issues, we call on the Managing Director to report to the IMFC on
progress on quota and governance reforms by the end of October.
• Surveillance mandate. Fund bilateral and multilateral
surveillance must be further strengthened, drawing lessons from the crisis.
Stronger and evenhanded surveillance to uncover vulnerabilities in large
advanced economies is a priority. Surveillance should also be better focused
on financial stability issues and their macroeconomic linkages, and more
attentive to cross-border spillovers. Synergies between surveillance tools
should also be strengthened. We welcome the decision to make FSAP financial
stability assessments mandatory for members with systemic financial sectors
as part of surveillance. We call for the 2011 triennial review to consider
the effectiveness of the Fund’s framework for surveillance, including its
rigor, candor, evenhandedness, focus on systemic issues, and ways to improve
its traction. We call on members to fulfill their obligations under Article
IV of the Articles of Agreement. We look forward to reviewing progress at
our next meetings.
• Financing mandate. Having overhauled its lending facilities
early in the crisis, we welcome recent decisions by the Executive Board to
further strengthen the Fund’s crisis prevention role by refining the
Flexible Credit Line and establishing the Precautionary Credit Line. These
are important initiatives that should now be assessed over time. Also, we
call on the Fund to continue its work on ways to improve its capacity to
help members cope with systemic shocks, and to cooperate with other relevant
bodies, in particular regional financial arrangements. We look forward to
progress reports.
• Mandate for international monetary stability. While the
international monetary system has proved resilient, tensions and
vulnerabilities remain as a result of widening global imbalances, continued
volatile capital flows, exchange rate movements, and issues related to the
supply and accumulation of official reserves. Given that these issues are
critically important for the effective operation of the global economy and
the stability of the international monetary system, we call on the Fund to
deepen its work in these areas, including in-depth studies to help increase
the effectiveness of policies to manage capital flows. We look forward to
reviewing further analysis and proposals over the next year.
Next IMFC meeting. Our next regular meeting
will be held in Washington, D.C. on April 16, 2011. We call on our Deputies
to prepare for our discussions in advance.
Attendance can be found at
http://www.imf.org/external/am/2010/imfc/attendees/index.htm
