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International Monetary Fund. Statistics Dept.


The 2019 Financial Soundness Indicators Compilation Guide (2019 Guide) includes new indicators to expand the coverage of the financial sector, including other financial intermediaries, money market funds, insurance corporations, pension funds, nonfinancial corporations, and households. In all, the 2019 Guide recommends the compilation of 50 FSIs—13 of them new. Additions such as new capital, liquidity and asset quality metrics, and concentration and distribution measures will serve to enhance the forward-looking aspect of FSIs and contribute to increase policy focus on stability of the financial system.

International Monetary Fund. Communications Department
This issue of Finance & Development presents success and works of IMF in the past 75 years since its formation. The IMF’s financial firepower must be increased substantially, particularly in a world of relatively free capital flows. If the world of cooperative globalization is to survive and the IMF is to maintain its role within it, a great deal must change. Some of these changes are within the IMF’s control. The most important challenges for the IMF of tomorrow are, however, those created by the changing world. Global cooperation is needed to reap the benefits and avoid the pitfalls of cross-border capital flows. Cross-border capital flows are neither an unmitigated blessing nor an undoubted curse. Used judiciously, they can be beneficial to recipient countries, making up deficiencies in the availability of long-term risk capital and reducing gaps in local corporate governance. Many emerging market economies have understood that they should build foreign exchange reserves. The IMF model suggests that fluctuations in the exchange rate are the main reason for fluctuations in corporate liquidity in receiving countries.
William Gbohoui, W. Raphael Lam, and Victor Duarte Lledo
Growing regional inequality within countries has raised the perception that “some places and people” are left behind. This has prompted a shift toward inward-looking policies and away from pro-growth reforms. This paper presents novel stylized facts on regional inequality for OECD countries. It shows that regional disparity in per-capita GDP is large (even after adjusting for regional price differences), persistent, and widening over time. The paper also finds that rising nationwide income inequality is associated with both rising within-region income inequality and widening average income across regions. The rise in inequality is related to declining incentives for interregional labor mobility, especially for poor households in lagging regions, which are estimated to reduce by as much as one-third in the United States. Against these facts, the paper proposes a framework to identify whether, how and by whom fiscal policies can be used to tackle regional inequality. It outlines conditions under which those policies should be spatially-targeted and illustrates how they can be complementary to conventional means-testing methods in mitigating income inequality.
Mr. Ashraf Khan
Drawing on the 2016 update of the IMF’s Central Bank Legislation Database, this paper examines differences in central bank legal frameworks before and after the Global Financial Crisis. Examples from select countries show that many central bank laws have undergone changes in objectives, decision-making, accountability, and data collection. A wider cross-country survey illustrates the common occurrence of price stability in central bank objectives, and varying practices in defining financial stability, “independence” versus “autonomy,” and who within a central bank determines monetary policy. The highlighted facts illustrate the uses of the database and could be a starting point for further analyses.
International Monetary Fund
Through the provision of both social and economic infrastructure, public investment can serve as an important catalyst for economic growth. A significant body of theoretical and empirical research underscores the positive relationship between investment in high-quality public infrastructure and economy-wide productivity.1 Against the background of a steady decline in public investment as a share of GDP in advanced economies, evidence of infrastructure bottlenecks in emerging economies, and the sluggish global economic recovery, the G-20 has called for ramping up public investment to raise long-run economic growth (G-20, 2014).2 However, the economic and social impact of public investment crucially depends on its efficiency. Despite anecdotal evidence of projects plagued by time delays, cost overruns, and inadequate maintenance, there are few robust empirical studies of the determinants of public investment efficiency. This paper explores the link between public investment management (PIM) institutions and the efficiency of public investment for the G-20 countries. Based on the analysis from a recent IMF study, the paper finds that better PIM enhances public infrastructure quality, and pinpoints key institutional reforms needs to boost public investment efficiency (IMF 2015). These findings and recommendations are based on a comprehensive data set on investment, infrastructure and capital stocks, and two analytical innovations: (i) a new cross-country Public Investment Efficiency Index (PIE-X); and (ii) a new Public Investment Management Assessment (PIMA) which is applied to G-20 countries.
Jose Daniel Rodríguez-Delgado
Financial frictions have been documented as an important determinant of firm dynamics. In this paper I model bankruptcy procedures, liquidation in particular, as an institutional feature that affects both sides of financial transactions. I construct a model of firm dynamics that generate endogenous borrowing limits and I find that a) inefficient bankruptcy procedures can have quantitatively important aggregate effects, but more importantly; b) that such effects would not be directly visible in the firms that industrial censuses and surveys focus on. I conclude that to capture the effects of the legal framework we need to look beyond the existing firms.
International Monetary Fund. Independent Evaluation Office


This sixth Annual Report describes the activities of the Independent Evaluation Office (IEO) during the year to April 30, 2009. The report summarized the findings of IEO's most recent evaluations, lists cross-cutting lessons highlighted in previous years' reports, and discusses ongoing evaluation projects. The report also describes the new framework for monitoring and following up on the implementation of IEO recommendations approved by the IMF Executive Board.