IMF Management and Staff Respond to the Report by the Independent Evaluation Office on IMF Performance in the Run-Up to the Financial&Economic Crisis

The International Monetary Fund’s (IMF) management and staff welcomed a report released today by the Independent Evaluation Office (IEO) on the Fund’s performance in the period up to the global economic and financial crisis, and broadly endorsed its recommendations. “I thank the IEO for putting forward many constructive ideas,” IMF Managing Director Dominique Strauss-Kahn said in a statement.

He said that the Fund has previously acknowledged that it had not warned of the crisis “in a sufficiently early, pointed, and effective way.” He also noted that the IEO report is consistent with the Fund’s own analysis and that a number of recent reform initiatives directly address the report’s main recommendations—supporting the Fund’s overall strategy of creating a more responsive and flexible institution. “The focus of the reform agenda being implemented is precisely on strengthening surveillance and financing for systemic stability,” Mr. Strauss-Kahn said.

He added that the reforms in train since 2007 (the period after the IEO analysis) will “go a long way to enhance the candor and traction of surveillance.” These include:

• A new early warning exercise;

• A vulnerability exercise for advanced economies;

• Fund inputs to the G-20’s Mutual Assessment Process

• Increased integration of the analysis and messages conveyed in the World Economic Outlook and the Global Financial Stability Report

• Mandatory financial stability assessments for systemic countries; and

• Cross-country and spillover reports.

Mr. Strauss-Kahn also emphasized that there was scope for further progress. “We should think about doing more,” he said—including consideration of how to bring in a greater diversity of views and dissenting voices. He noted that the Triennial Surveillance Review, expected by September 2011, will consider additional actions to improve the quality of IMF surveillance.