Review Hails Successes of IMF's Safeguards Assessments

Strong endorsement of policy's success

Benefits in strengthening central banks' internal processes

Continuous change to maintain policy's effectiveness

Safeguards assessments were introduced in mid-2000 as a complement to the IMF’s traditional safeguards mechanisms, such as conditionality and program design. Conducted for member countries that access Fund finances, these assessments are a diagnostic review of the adequacy of a central bank’s audit, reporting, and control mechanisms.

In this interview, two senior officials from the IMF’s Finance Department—Director Andrew Tweedie and Assistant Director Chris Hemus—together with the chair of the independent review panel, Lynn Turner, discuss the outcomes of the review, including the benefits for the Fund and member country central banks, plus expected improvements in the policy.

IMF Survey online: What did the review of the Safeguards Assessment Policy set out to achieve?

TWEEDIE: The main aim of the review was to take stock of the safeguards policy, make sure it’s still achieving its goals, and look for possible areas where we could enhance the policy. The policy is now 10 years old and a lot has happened in the past decade. The policy has matured, and there have also been a lot of advances in central bank audit and control practices, so it is a timely opportunity to step back and make sure the policy is still achieving its goals.

IMF Survey online: What was the role of the independent panel?

TWEEDIE: We involved an independent expert panel at the inception of the policy and in each of the three reviews. The panel brings a valuable outside perspective and, importantly, as the safeguards reports themselves are kept confidential, the panel helps provide assurances that the policy has been effective. We were very fortunate with this review to have a very distinguished panel.

TURNER: The panel provides an independent view that gives a greater degree of confidence in the program to the Board and serves to confirm what the staff is recommending, to the extent that we agreed. In this case, there was a lot of agreement between the panel and Fund staff about the program’s successes, as well as how to continually improve the program.

An outside panel also helps in reaching out to stakeholders. They feel reassured that there really is an independent perspective. Our panel found the stakeholders—from within the Fund and from other institutions, including a number of central banks and the...