The pressure of work in responding to the COVID-19 pandemic meant some delays in the follow-up process for IEO evaluations, but the process is now largely back on track. The Management Implementation Plan (MIP) in response to the IEO’s evaluation of IMF Advice on Capital Flows was approved by the Board in May 2021 (IMF, 2021a), and the MIP for the evaluation of IMF Collaboration with the World Bank on Macro-Structural Issues is expected to be approved shortly after the August 2021 Board recess (IMF, 2021b). The 2021 Periodic Monitoring Report (PMR) of progress with MIP implementation prepared by the Office of Internal Audit is scheduled to be presented to the Board in September and the reformulated MIPs to address of-track actions identified in the 2020 report on Categorization of Open Actions (IMF, 2020) should be completed by the end of the year. The previous PMR was discussed at the Board before the pandemic in January 2020.
The MIP for the IMF Advice on Capital Flows evaluation sets out actions that provide a strong basis for further strengthening the IMF’s capital account work as suggested in the IEO evaluation (IMF, 2021a). The key action item will be a staff review of the IMF’s Institutional View for the Liberalization and Management of Capital Flows, expected to be completed later this year. It will take on board findings and recommendations from the IEO’s evaluation as insights from the staff’s work on the Integrated Policy Framework as well as recent research and lessons from experience. The MIP also includes actions aimed to:
▸ Enhance and coordinate a Fund-wide research agenda that will provide for more research on the costs and benefits of capital account and macroprudential measures, deepen work on the Integrated Policy Framework, and explore refinements to analyze the effects of capital account-related issues on external balances.
▸ Improve the monitoring and analysis of capital flows, including by increasing resources for the Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), producing indices of capital account openness, and updating the IMF Taxonomy of Capital Flow Management Measures.
▸ Strengthen cooperation on policy issues affecting capital flows with the OECD and other international organizations to address systemic concerns affecting the global financial system and unintended tensions between the IV and the Basel III framework.