The Executive Board of the International Monetary Fund (IMF) has approved reforms to the IMF’s exceptional access lending framework, which governs access above the Fund’s normal financing limits, to make it more calibrated to members’ debt situations, while avoiding unnecessary costs for the members, creditors, and the financial system as a whole. These reforms were put forward in a 2015 staff paper “The Fund’s Lending Framework and Sovereign Debt – Further Considerations.” The Board’s January 20, 2016 decision follows a preliminary Board discussion on this topic in June 2014 (Press Release No. 14/294).
The approved reforms include the elimination of the “systemic exemption” introduced in 2010, an increase in flexibility for members where debt is assessed to be sustainable but not with high probability, and a clarification to the criterion related to market access. IMF staff consulted with numerous stakeholders, including market participants, in the course of its work on the reforms.
In May 2013, the Executive Board endorsed a four-pronged work program and asked staff to present options for reform (see Public Information Notice No. 13/61). Two of the four components were concluded earlier. These are: (i) strengthening the contractual framework to address collective actions problems (see Press Release No. 14/459); and, (ii) reforming the IMF’s policy on the non-toleration of arrears to official creditors (see Press Release No. 15/555). Additional work related to private sector involvement in debt restructurings, including the lending-into-arrears policy, will begin shortly.
An explanation of any qualifiers used in summings up can be found here: http://www.imf.org/external/np/sec/misc/qualifiers.htm.