8. The crisis has produced or exacerbated serious, wide-ranging yet differentiated impacts across the globe. Since the crisis began, many States have reported negative impacts, which vary by country, region, level of development and severity, including the following:
• Rapid increases in unemployment, poverty and hunger
• Deceleration of growth, economic contraction
• Negative effects on trade balances and balance of payments
• Dwindling levels of foreign direct investment
• Large and volatile movements in exchange rates
• Growing budget deficits, falling tax revenues and reduction of fiscal space
• Contraction of world trade
• Increased volatility and falling prices for primary commodities
• Declining remittances to developing countries
• Sharply reduced revenues from tourism
• Massive reversal of private capital inflows
• Reduced access to credit and trade financing
• Reduced public confidence in financial institutions
• Reduced ability to maintain social safety nets and provide other social services, such as health and education
• Increased infant and maternal mortality
• Collapse of housing markets.
Causes of the crisis
9. The drivers of the financial and economic crisis are complex and multifaceted.
We recognize that many of the main causes of the crisis are linked to systemic
fragilities and imbalances that contributed to the inadequate functioning of the global economy.
Major underlying factors in the current situation included inconsistent and insufficiently coordinated macroeconomic policies and inadequate structural reforms, which led to unsustainable global macroeconomic outcomes.
These factors were made acute by major failures in financial regulation, supervision and monitoring of the financial sector, and inadequate surveillance and early warning.
These regulatory failures, compounded by over-reliance on market self-regulation, overall lack of transparency, financial integrity and irresponsible behaviour, have led to excessive risk-taking, unsustainably high asset prices, irresponsible leveraging and high levels of consumption fuelled by easy credit and inflated asset prices.
Financial regulators, policymakers and institutions failed to appreciate the full measure of risks in the financial system or address the extent of the growing economic vulnerabilities and their cross-border linkages.
Insufficient emphasis on equitable human development has contributed to significant inequalities among countries and peoples.
Other weaknesses of a systemic nature also contributed to the unfolding crisis, which has demonstrated the need for more effective government involvement to ensure an appropriate balance between the market and public interest.
Response to the crisis
10. We are all in this crisis together.
While each country has primary responsibility for its own economic and social development, we will continue to work in solidarity on a vigorous, coordinated and comprehensive global response to the crisis in accordance with our respective abilities and responsibilities.
Financial Stability Board – Financial Stability Forum
- 16 Jun
- The Financial Stability Board will hold its Inaugural Meeting in Basel on 26-27 June.
With advanced economies still struggling, the IMF is urging governments to fully implement the spending measures they have announced to combat the global economic crisis and not to relax in supporting an incipient recovery.
- FSF Principles for Cross-border Cooperation on Crisis Management
- FSF Principles for Sound Compensation Practices
- Ongoing and Recent Work Relevant to Sound Financial Systems
- Report of the Financial Stability Forum on Addressing Procyclicality in the Financial System
- Report of the Financial Stability Forum on Enhancing Market and Institutional Resilience – Update on Implementation
IMF AND CIVIL SOCIETY
IMF Invites Civil Society Input Into Governance Reform
IMF Survey online
June 26, 2009
- Move follows calls from civil society for voice in reform process
- Proposals to be channeled by independently run website
- Process to culminate at IMF-World Bank Annual Meetings in Istanbul
The IMF is asking civil society organizations (CSOs) for input into proposals to reform the way the institution is governed.
An independently run website has been set up to help collate and synthesize the CSO input, which will feed into IMF staff’s preparation of governance reform papers for IMF Executive Board discussions before the IMF-World Bank Annual Meetings in October. The process will culminate in a meeting between IMF Managing Director Dominique Strauss-Kahn and CSOs during the 2009 Annual Meetings in Istanbul, Turkey.
The effort to involve CSOs in IMF governance reform—called the Fourth Pillar—follows calls from civil society for a voice in the process. The move started with a series of letters to civil society figures from Strauss-Kahn in late 2008 and also involved an April videoconference between Strauss-Kahn and CSOs on three continents.
The three existing pillars comprise work already done by
• The IMF’s Independent Evaluation Office, which released a report on “Governance of the IMF” in May 2008
• The IMF Executive Board, which is examining proposals from a Working Group on IMF Corporate Governance, and
• The Committee of Eminent Persons on IMF Governance Reform, which reported in March 2009.
The IMF uses the term civil society organization to refer to the wide range of citizens’ associations that exists in virtually all member countries to provide benefits, services, or political influence to specific groups within society.
CSOs include business forums, faith-based associations, labor unions, local community groups, nongovernmental organizations, philanthropic foundations, and think tanks. Usually excluded are branches of government—such as government agencies and legislators—and also individual businesses, political parties, and the media. Labor unions often distinguish themselves from CSOs.
The IMF has invited the New Rules for Global Finance Coalition to coordinate the inputs and interaction with CSOs during the consultation period. The coalition is a Washington, D.C.-based organization that advocates advancing reforms of the governance and practices of international financial institutions.
The IMF is providing logistical support through the funding and development of the independent and interactive website, where CSOs can submit materials, engage in debates, and offer feedback. New Rules for Global Finance will be the sole administrator of the website.
Proposals can be submitted through the website, or directly to the IMF at email@example.com. A representation of submitted materials will be translated into French, Spanish, and English; translations in additional languages will be accommodated where possible.
Comments on this article should be sent to firstname.lastname@example.org
Governance reform at the IMF is one of the most important tasks facing the institution. In March 2008, the Executive Board approved a resolution increasing the voice and participation of emerging market economies and low-income countries in the institution. Now further reforms are under consideration.
Additional proposals include a reassessment of the roles and responsibilities of the Board of Governors, the International Monetary and Financial Committee (IMFC), the Executive Board, and IMF Management, as well as procedures for selecting the IMF Managing Director. The Fourth Pillar—like the other three pillars—will inform a forthcoming Board paper on governance reform, which will be presented to the Board of Governors at the 2009 Annual Meetings in Istanbul.
Recommendations and principles to strengthen financial systems
On 2 April 2009, the Financial Stability Forum (FSF) issued reports covering:
- Recommendations for Addressing Procyclicality in the Financial System;
- Principles for Sound Compensation Practices; and
- Principles for Cross-border Cooperation on Crisis Management.
The Forum also published today an update on the implementation of the recommendations contained in the FSF’s April 2008 Report on Enhancing Market and Institutional Resilience.
Addressing procyclicality in the financial system
The present crisis has demonstrated the disruptive effects of procyclicality – mutually reinforcing interactions between the financial and real sectors of the economy that tend to amplify business cycle fluctuations and cause or exacerbate financial instability. Addressing procyclicality in the financial system is an essential component of strengthening the macroprudential orientation of regulatory and supervisory frameworks.
The recommendations set out in this report mitigate mechanisms that amplify procyclicality in both good and bad times. They encompass a mix of quantitative/rules-based and discretionary measures that are interrelated and reinforce one another. They will be implemented over time once conditions in financial markets return to normal.
Principles for Sound Compensation Practices
The Principles require compensation practices in the financial industry to align employees’ incentives with the long-term profitability of the firm. The principles call for effective governance of compensation, and for compensation to be adjusted for all types of risk, to be symmetric with risk outcomes, and to be sensitive to the time horizon of risks. Implementation by firms will be reinforced through supervisory examinations at the national level.
Principles for Cross-border Cooperation on Crisis Management
Through these Principles , relevant authorities, including supervisory agencies, central banks and finance ministries, commit to cooperate both in making advanced preparations for dealing with financial crisis and in managing them.
Update on the Implementation of the April 2008 FSF Recommendations
The update on progress in implementing the recommendations of the April 2008 Report on Enhancing Market and Institutional Resilience covers actions in five areas: (i) strengthening capital, liquidity and risk management in the financial system; (ii) enhancing transparency and valuation; (iii) changing the role and uses of credit ratings; (iv) strengthening the authorities’ responsiveness to risks; and (v) putting in place robust arrangements for dealing with stress in the financial system.
The previous follow-up report, issued in October 2008, is available here.
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Boeing says a Dreamliner order is canceled
Published: Feb. 2, 2009 at 9:42 AM
CHICAGO, Feb. 2 (UPI) — U.S plane maker Boeing said a customer, presumably Russian airline S7, canceled its order for 15 new 787 Dreamliner jets.
[ . . . ]
Boeing said a machinist strike and a charge of $685 million for delays in the development of the latest 747 jumbo jet resulted in a loss of $56 million in the fourth quarter. The company announced it was cutting 10,000 jobs to adjust to the slowing economy.
In 2007, Boeing made $1 billion in the fourth quarter.
Before the cancellation, there were 910 Dreamliners on order. McNerney said Boeing expected other cancellations as the economy slowed.
June 26, 2009
Communiqué at the Conclusion of the Eighth Annual Regional Conference on Central America, Panama, and the Dominican Republic
June 26, 2009
June 26, 2009
Summarizes key components of research done at the IMF
June 26, 2009
Working Paper No. 09/133
Asia-Pacific in Figures
This statistical pocketbook contains key data for 58 countries or areas on population statistics, social statistics, employment, energy, national accounts, external trade, central government expenditure by function, finance, production, prices, land use, transport and tourism. Where official government figures are not available, the tables draw on data from the United Nations and other international sources.
Asia-Pacific in Figures is available in pocket book format in English as a sales publication.
|Last update: 10 June 2009|
Short-term Indicators for Asia and the Pacific
Short-term indicators (last update: 10 June 2009). The online database contains time series data for 31 of the regional members and associate members of ESCAP and is designed to provide up-to-date monthly (or quarterly) data to assess economic trends for countries or areas in the region. The online database covers the period from January 2003 and is updated every quarter.
Annual Core indicators
Annual Core Indicators (last update: 21 April 2009).The online database contains time series data for selected indicators covering a wide range of issues in relation to the secretariat’s work: demography, migration, education, health, poverty, gender, employment, economy, government finance, employment, transport, and environment.
Among other indicators, this database contains data published in the Statistical Yearbook for Asia and the Pacific 2008. The time series are generally longer and more complete in the database. Because of different presentation requirements, the indicator names in the database and the Yearbook may be slightly different.
[ From – ]
UNESCAP – United Nations Economic and Social Commission for Asia and the Pacific
United Nations Statistics Division
Jacques Polak Research Conference
Call for Papers:
Financial Frictions and Macroeconomic Adjustment
November 5—6, 2009
The International Monetary Fund will hold the Tenth Annual Jacques Polak Research Conference at its headquarters in Washington, DC, on November 5-6, 2009.
The conference is intended to provide a forum for discussing innovative research in economics, undertaken both by IMF staff and by outside economists, and to facilitate the exchange of views among researchers and policy makers. Ricardo Caballero (MIT) will deliver the Mundell-Fleming lecture.
The theme of this year’s conference is Financial Frictions and Macroeconomic Adjustment. Possible topics include (but are not restricted to):
- Dynamics of balance sheets and insolvencies during liquidity and solvency crises
- Amplification mechanisms during financial crises and their macroeconomic implications
- The impact of balance sheet adjustments on macroeconomic and financial aggregates
- Lessons from history and country cases about liquidity and solvency crises, and their resolution
- Policy responses to cope with financial imbalances and widespread insolvencies
- The treatment of insolvencies in various legal frameworks and its effects on aggregate outcomes
- The political economy of insolvencies and bailouts
Papers that do not fit into these categories, but that are related to the main theme of the conference, are also welcome.
Interested contributors should submit a draft paper or a two-page proposal to the Program Committee. The proposal should include the title of the paper, the author(s)’ affiliation and contact information, the main questions to be examined, the most relevant literature, the intended contribution of the paper to the literature, and the possible data sets and methodology to be employed. Authors should also provide a copy of their curriculum vitae. All presenters will be reimbursed for travel expenses and accommodation.
Please submit your proposals (in a Word or PDF file) by May 31, 2009 (e-mail to ARC2009@imf.org). Please use the contact author’s name as the name of the file. The Program Committee will evaluate all proposals in terms of originality, analytical rigor, and policy relevance and will contact the authors whose papers have been selected by late June. A 15-page work-in-progress draft will be required by August 14, 2009. Further information on the conference program will be posted on the this webpage.
June 26, 2009
Advanced Economies – from IMF analysis on website –
Facing Crisis at Home
Public information notice
IMF Policy Papers