The global economy faced a number of challenges during FY2008. As problems in the U.S. subprime mortgage market spilled over into other credit markets, growth prospects slowed in a number of the advanced economies; at the same time, prices for food and oil surged, adding to inflationary pressures worldwide and creating severe hardships for many low-income countries.1 The IMF’s Executive Board—in accordance with the Fund’s core mandate of safeguarding global macroeconomic and financial stability—responded to these developments immediately, strengthening the Fund’s analysis of financial sector issues, recommending policies that could help member countries mitigate the impact of turmoil in financial markets on their economies, and offering policy advice to low-income countries on macroeconomic management in the face of rising costs for food and fuel as well as financial assistance to members in this group experiencing balance of payments problems triggered by the higher cost of imports.2 FY2008 was also a year of reform in the IMF, as the Executive Board moved ahead with measures that will enable the IMF to better meet the evolving needs of its member countries, keep pace with changes in the global economy and financial markets, and adjust to a reduced budgetary envelope.