More effective IMF surveillance
| Author | Lynn Aylward |
| Position | IMF Policy Development and Review Department |
| Pages | 217-229 |
Page 217
Surveillance-the ongoing dialogue that the IMF has with its member countries on their economic policies-lies at the heart of the organization's efforts to ensure a stable international monetary system and prevent crises. In its 2004 biennial review of surveillance, the IMF's Executive Board identified six priority areas in which effectiveness could be strengthened, including sharpening the focus of surveillance and deepening attention to exchange rate issues. Lynn Aylward (IMF Policy Development and Review Department) looks at the progress to date.
Page 228
The ongoing dialogue between the IMF and its member countries on their economic policies-surveillance, in IMF-speak-is a key component in the institution's mission to help ensure a stable international monetary system and prevent crises. Given the importance of surveillance, the IMF carries out biennial reviews to maintain and improve its effectiveness.While every review makes recommendations for strengthening surveillance, the IMF's Executive Board did something new at its most recent review in July 2004. It identified six priorities and charged staff with monitoring progress toward achieving these priorities.
Lynn Aylward of the IMF's Policy Development and Review Department reports on the staff 's role and the progress to date.
The ultimate objectives of the IMF's economic policy oversight and advice remain the same today as they did in 1977, when the Executive Board adopted the decision that put surveillance into effect. But the framework for surveillance is far from static. Lessons learned from major international developments and events have helped shape its evolution. In its most recent review, the Executive Board recommended that the IMF prioritize and monitor the goal it sets for surveillance. In particular, the review established six priority objectives: a sharpened focus in the IMF's regular ("Article IV") consultations with member countries; a deeper treatment of exchange rate issues; enhanced financial sector surveillance; greater attention to regional and global spillovers in country surveillance; progress in improving debt sustainability and reducing balance sheet vulnerabilities; and further work on surveillance in lowincome countries.
As a first step in pursuing these priorities, the IMF updated and fine-tuned the guidance that it provides to its own...
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