United States: Staff Report for the 2010 Article IV Consultation—Informational Annex

The U.S. economy is recovering from a financial crisis, but remains vulnerable to shocks. Executive Directors welcomed health care reform, fiscal stabilization, and the Financial Sector Assessment Program (FSAP) assessment, which acknowledged that the financial system has strengthened. Directors underscored the risks in the over-the-counter (OTC) derivatives markets, revitalizing private securitization, and reforms to the housing finance system, including government-sponsored enterprises (GSEs). Directors appreciated the United States for promoting multilateral economic management. Directors assessed that U.S. economic policy could help secure global growth and stability through fiscal consolidation, which could reduce account deficit, and strengthen the financial sector.

Abstract

The U.S. economy is recovering from a financial crisis, but remains vulnerable to shocks. Executive Directors welcomed health care reform, fiscal stabilization, and the Financial Sector Assessment Program (FSAP) assessment, which acknowledged that the financial system has strengthened. Directors underscored the risks in the over-the-counter (OTC) derivatives markets, revitalizing private securitization, and reforms to the housing finance system, including government-sponsored enterprises (GSEs). Directors appreciated the United States for promoting multilateral economic management. Directors assessed that U.S. economic policy could help secure global growth and stability through fiscal consolidation, which could reduce account deficit, and strengthen the financial sector.

Annex I. United States: Fund Relations

(As of April 30, 2010)

I. Membership Status: Joined 12/27/45; Article VIII

II. General Resources Account:

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III. SDR Department:

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IV. Outstanding Purchases and Loans: None

V. Financial Arrangements: None

VI. Projected Obligations to Fund: None

VII. Exchange Rate Arrangements: The exchange rate of the U.S. dollar floats independently and is determined freely in the foreign exchange market.

VIII. Payments Restrictions. The United States accepted Article VIII of the IMF’s Articles of Agreement and maintains an exchange system free of restrictions and multiple currency practices with the exception of limited restrictions on certain payments and transfers imposed for security reasons. The United States currently administers approximately 30 economic sanctions programs, which restrict certain payments and transfers for transactions against particular foreign governments, entities, and individuals. The United States administers, inter alia, sanctions programs relating to Burma, Cuba, Iran, North Korea, and Sudan, and continues to block certain previously frozen assets of the former Yugoslavia. Several other sanctions programs, including those relating to Côte d’Ivoire, Liberia, Somalia, Syria, Western Balkans, and Zimbabwe are “list-based” programs, affecting only members of certain government regimes and other individuals and groups whose activities have been determined to threaten the foreign policy or economy of the United States. The United States also implements similar list-based sanctions programs against: narcotics traffickers; terrorism-related governments, entities, and individuals; and proliferators of weapons of mass destruction.

IX. Article IV Consultation. The 2009 Article IV consultation was concluded in July 2009 and the Staff Report was published as IMF Country Report 09/187. A fiscal ROSC was completed in the context of the 2003 consultation. An FSAP was conducted during the Fall of 2009 and Spring of 2010. The FSSA will be discussed at the board, together with the 2010 Article IV Consultation, on July 26, 2010.

The 2010 Article IV discussions were conducted from May 11-June 28. Concluding meetings with Chairman Bernanke of the Board of Governors of the Federal Reserve System and Treasury Secretary Geithner occurred on June 21 and 28. A press conference on the consultation was held on July 8, 2010. The team comprised D. Robinson (Head), C. Kramer, M. Estevão, O. Celasun, A. Maechler, M. Sommer, N. Batini, E. Tsounta, and G. Bin Li (all WHD); A. Bhatia, B. McDonald, and Mika Saito (all SPR); F. Columba and J. Kiff (all MCM); and J. Myers and S. Dawe (LEG). Ms. Lundsager (Executive Director) and Mr. Lin (Advisor) attended some of the meetings. Outreach included discussions with the private sector and think tanks. The authorities have agreed to the publication of the staff report.

Annex II. Statistical Issues

Statistical Issues: Comprehensive economic data are available for the United States on a timely basis. The quality, coverage, periodicity, and timeliness of U.S. economic data are adequate for surveillance. Coverage of international capital flows in external sector statistics has been improved, with the June 2007 releases of BOP and IIP data on financial derivatives. The United States has subscribed to the Special Data Dissemination Standard (SDDS) and its metadata are posted on the Dissemination Standard Bulletin Board (DSBB).

United States: Table of Common Indicators Required for Surveillance

(As of June 30, 2010)

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Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Includes external gross financial asset and liability positions vis-à-vis nonresidents

Daily (D), Weekly (W), Biweekly (B), Monthly (M), Quarterly (Q), Annually (A); NA: Not Available.

United States: 2010 Article IV Consultation-Staff Report; Staff Statement; and Public Information Notice on the Executive Board Discussion
Author: International Monetary Fund