Köhler pays tribute to Manuel Guitián

• Pages: 75

Page 75

IMF Managing Director Horst Köhler, in remarks delivered before Robert Mundell's memorial lecture, paid tribute to Manuel Guitián as "a Spaniard by birth, but a true internationalist by choice."His contributions, Köhler said, "did much to strengthen the institution of which we are a part, and he was here during an important and formative phase of its evolution."

Köhler highlighted five areas in which Guitián's work continued to influence policy discussions in the IMF:

* He saw the IMF primarily as a vehicle for international monetary cooperation, recognizing that, over time, globalization would make this work even more important.

* He viewed conditionality as an essential component of IMF lending-both to protect the revolving nature of IMF financing and to contain the risk of moral hazard.

* He wrote eloquently about the trade-off between rules and discretion in the conduct of monetary policy.Underlying his analysis was the proposition that, in the end, the difference is one of degree, since all economic policy frameworks must include both some rules and some elements of discretion.

* He insisted that bank soundness and supervision were, as he put it, "the neglected dimension of monetary policy."

The need for the IMF to focus on the soundness of the...