Front Matter Page
IINTERNATIONAL MONETARY FUND
2011 Triennial Surveillance Review—Staff Background Studies
Prepared by the Strategy, Policy, and Review Department
August 26, 2011
Contents
Chapter I. Exchange Rate and External Stability Assessments
A. Previous Reviews and Implementation of the 2007 Decision
B. Developments in Exchange Rate Analysis: Methods
C. The Multilateral CGER Exercise
D. Bilateral Exchange Rate Analysis
E. Article IV Review and Survey Results
F. Candor and Evenhandedness
G. Transparency
H. External Stability and Integration with Policy Advice
Appendix I. Technical Challenges for Exchange Rate Analysis of Non-CGER Countries
Appendix II. Developments in CGER Methods
Figures
1. Staff‘s Assessment of Article IV Reports:
2. Mission Chiefs: Extent to Which the Following Factors Posed a Challenge for the Full Treatment of Exchange Rate Issues in Your Latest Staff Report
3. Perceptions of Quality: Country Authorities
4. Perceptions of Quality: Executive Directors
5. Perceptions of Quality: Financial Market Participants
6. Exchange Rate Assessments in 2010
7. Over-/Under-Valuation and Bottom Line Assessments: All Countries
8. Over-/Under-Valuation and Bottom Line Assessments: Floats and Pegs
9. External Stability Issues
Boxes
1. Previous Findings and Recommendations
2. External Stability Assessments and Exchange Rate Analysis
3. Implementing Exchange Rate Assessments
4. Case Study of Bulgaria and the Baltic Republics: Consistency of Exchange Rate Analyses Across Countries
5. Consistency of Exchange Rate Assessments over Time: Case Studies
Acronyms
| AEs |
Advanced Economies |
| AFR |
African Department |
| AMRO |
ASEAN +3 Microeconomic Research Office |
| APD |
Asian and Pacific Department |
| CAs |
Country Authorities |
| CSOs |
Civil Society Organizations |
| CGER |
Consultative Group on Exchange Rate Issues |
| ECCU |
Eastern Caribbean Currency Union |
| EDs |
Executive Directors |
| EMs |
Emerging Markets |
| ERER |
Equilibrium Real Exchange Rate |
| ES |
External Stability |
| EUR |
European Department |
| EWE |
Early Warning Exercise |
| FM |
Fiscal Monitor |
| FMPs |
Financial Market Participants |
| FSAPs |
Financial Sector Assessment Program |
| FSB |
Financial Stability Board |
| FSS |
Financial Sector Surveillance |
| FSSGN |
Financial Sector Surveillance Guidance Note |
| G-20 MAP |
G-20 Mutual Assessment Process |
| GFSR |
Global Financial Stability Report |
| GPM |
Global Projection Model |
| GIMF |
Global Integrated Monetary and Fiscal Model |
| IEO |
Independent Evaluation Office |
| IMS |
International Monetary System |
| LCFIs |
Large and Complex Financial Institution |
| LIC |
Low-Income Countries |
| MB |
Macroeconomic Balance |
| MCD |
Middle East and Central Asia Department |
| MCM |
Monetary Capital Markets Department |
| MCs |
Mission Chiefs |
| NBFI |
Non-Bank Financial Institution |
| NFA |
Net Foreign Assets |
| RAMs |
Risk Assessment Matrix |
| REO |
Regional Economic Outlook |
| RES |
Research Department |
| REER |
Real Effective Exchange Rates |
| SIBs |
Systemically Important Banks |
| SIFIs |
Systemically Important Financial Institution |
| SSP |
Statement of Surveillance Priorities |
| SPR |
Strategy, Policy and Review Department |
| TA |
Technical Assistance |
| TSR |
Triennial Surveillance Review |
| VEA |
Vulnerability Exercise for Advanced Countries |
| VEE |
Vulnerability Exercise for Emerging Market Countries |
| VE-LIC |
Vulnerability Exercise for Low Income Countries |
| WEO |
World Economic Outlook |
| WHD |
Western Hemisphere Department |
Contributors
TSR Team—Overview; Background Studies; and Health Check and Statistical Information: Ritu Basu, Sean Cogliardi, Era Dabla-Norris, Jean-Francois Dauphin, Lawrence Dwight, Gilda Fernandez, Kerstin Gerling, Rob Gregory, Olessia Korbut; Tetsuya Konuki, Jules Leichter, Svitlana Maslova, Nicolas Million, Toshiyuki Miyoshi, Gillian Nkhata, Kingsley Obiora, Gilda Ordonez-Baric, Wasima Rahman-Garrett, Ricardo Reinoso, Hitoshi Sasaki, Michele Shannon, Alison Stuart, Claire Waysand, and Bert van Selm (all SPR); Irineu Evangelista de Carvalho Filho and Hui Tong (RES), Elena Loukoianova (MCM), Jacques Miniane (EUR), and Zaijin Zhan (AFR).
Contents
Chapter II. Financial Sector Analysis in Bilateral Surveillance
I. Introduction
II. Fund Work on Financial Stability
III. The State of Financial Sector Surveillance: Progress and Remaining Gaps
IV. Deepening Analysis and Greater Global Focus
A. Coverage
B. Risk Identification and Transmission Channels
C. Cross-Border Linkages
D. Recommendations to Support a Risk-Based Approach
E. Follow-up on Policy Recommendations
V. The Analytical Toolkit
VI. Data Limitations
VII. Resources
Appendix I. The FSAP
Appendix II. The FSS Case Study for 17 Economies
Appendix III. List of Analytical Financial Sector Tools for Surveillance
Figures
1. Financial Sector Surveillance: Contribution and Progress
2. Risk Identification and Analysis of Transmission
3. The Mission Chiefs‘ Survey Points to Areas for Improvement
4. Resources Devoted to Financial Sector Surveillance
Boxes
1. Progress over the Past Three Years.
2. Mission Chiefs‘ Comments on the Most Challenging Financial Sector Surveillance Issue
3. Case Studies
4. Progress in Risk Identification 2007–10
5. Good Practice Coverage of Financial Sector Risks That Affect the Macroeconomy
6. Using the Vulnerabilities Exercises (VEs) and LCFI Analysis to Strengthen Financial Sector Surveillance
7. Good Practice—Financial Interconnectedness Applications
8. Analytical Financial Sector Tools for Surveillance
Chapter III. Fund Advice on Stimulus and Exit Policies
I. Introduction
II. Overview of Fund‘s Messages on Stimulus and Exit
III. From Multilateral to Bilateral Advice
IV. Clarity and Timeliness
V. Attention to Country-specific Circumstances and Risks
VI. Coverage of Spillovers Related to Advice on Stimulus and Exit Policies
VII. Traction
Figures
1. Timeline of Global Crisis
2. Stances of Macroeconomic Policies
3. Relationship Between Key Macroeconomic Policy Variables and Policy Space
Boxes
1. Sources
2. Staff Papers on the Provision of Advice on Stimulus and Exit Policies
3. Did the Fund‘s Advice on Stimulus Take Into Account Financial Sector Vulnerabilities?
4. The Fund‘s Advice on Exits from Fiscal Stimulus: U.K. versus U.S.
5. Coverage of US Monetary Policy Spillovers
Chapter IV. Selected Issues in IMF Surveillance in LICs
I. Introduction.
II. LIC Multilateral Surveillance
III. Financial Sector Surveillance in LICs
IV. Exchange Rate Assessment in LICs
Figures
1. Country Authorities Survey: Impact of Fund Surveillance
2. Financial Deepening in LICs
3. Staff Assessment of Article IV Reports: Financial Sector Surveillance
4. IMF Financial Sector-Related Resources Dedicated to LICs
5. Staff‘s Assessment of Article IV Reports—Exchange Rate Assessment
6. Mission Chief Survey: Exchange Rate Assessment
Box
1. Inward Spillovers to LICs