IMF's strategic review progressing

• Pages: 49-51

Page 49

Speaking at Rome's Aspen Institute,Managing Director Rodrigo de Rato reviewed progress in the IMF's work to reshape its priorities and directions over the medium term, so that it can help its members meet the challenges of globalization. He highlighted the need to sharpen the focus of Fund surveillance on the interaction between macroeconomic and financial developments and to adapt the Fund's relationship with its emerging market members.

Page 51

De Rato outlines further progress with IMF's strategic review

IMF Managing Director Rodrigo de Rato outlined progress under way in the IMF's review of its medium-term strategy in a February 9 address in Rome. Stressing that the IMF must adapt to be able to continue to serve its members, he told his audience at the Aspen Institute that the IMF must, among other priorities, sharpen the focus of its surveillance and adapt its work with emerging countries.

Surveillance remains central

The Fund's surveillance of individual economies and the global economy is, de Rato observed, "the international community's chosen instrument to promote global financial and economic stability."

The Fund has strengthened this key tool, he said, but it must now sharpen its focus-monitoring larger and systemically important economies more intensely and paying closer attention, in global surveillance, to the critical interaction between macroeconomic issues and financial sector developments and vulnerabilities.

To bolster the IMF's understanding of financial and capital markets, de Rato said, he decided to merge two existing departments to create "a single center of excellence" for all aspects of the Fund's financial, capital market, and monetary policy work.

Going forward, steps will also be taken to "secure more effective integration of financial sector specialists into our country work." On exchange rate surveillance, de Rato said an enhanced focus on exchange rate issues is needed.He welcomed several suggestions advanced by U.S. Treasury Undersecretary Tim Adams (see page 64), noting that they echo "very well" some of the IMF's own thinking. De Rato also raised the possibility of expanding the IMF's multilateral analysis of equilibrium exchange rates to include emerging market countries and advanced...