New Emphasis on IMF's Global Monitoring Role
“It is connecting the dots [between risks] that is extremely important,” said Tharman Shanmugaratnam, Singapore’s Minister for Finance, who chaired a key ministerial meeting of the IMF’s policy-setting body, the International Monetary and Financial Committee (IMFC).
“If I had to give one qualification to these Spring Meetings, [it would be] that these are the meetings on strengthening Fund surveillance,” said IMF Managing Director Dominique Strauss-Kahn.
The Spring Meetings of the IMF and World Bank in Washington bring together finance ministers and central bank governors from around the world. They identified a slew of continued and emerging risks to the global economy, including higher food and fuel prices, the disaster in Japan, unrest in the Middle East, lingering unemployment in parts of the world, and the risk of overheating in some dynamic emerging markets.
IMFC Chairman Tharman Shanmugaratnam addresses news conference during IMF-World Bank Spring Meetings (photo: Michael Spilotro/IMF)
To keep track of these looming problems and other global risks, “we have to be extremely watchful,” Shanmugaratnam, the first Asian to hold the chairmanship of the IMFC, told reporters. “We also need to develop the capabilities of the Fund to address risks proactively, to anticipate possible scenarios that could turn out to be ugly, and to require that countries, including especially systemically significant countries, take actions early to prevent another major crisis.”
New kinds of analysis
Strauss-Kahn said the IMF would pull together the different strands of its work to produce a new consolidated report on multilateral surveillance, that would include analysis about the possible impact or “spillovers” of problems in one part of the world affecting others and about policy actions by one country that could affect others.
Tracking spillovers required the IMF to be adroit, said Shanmugaratnam, and to draw on a wider range of information and involving expert opinion.
“We are at Year One of the new multilateral surveillance for the Fund,” Strauss-Kahn said. To underpin the new approach, the IMF was working in three areas.
• Rethinking economic theories in the wake of the global crisis
• Rethinking policy advice, including, for example...
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