April 16th, 2011
Econintersect: The communiqué of the Twenty-Third Meeting of the International Monetary and Financial Committee of the Board of Governors of the International Monetary Fund said the global economy was continuing to gain strength but listed several areas of concern:
- Employment Creation
- Financial Stability
- Higher Commodity Prices
- Effects of devestation in Japan
- Spill over of Middle East and North Africa unrest
Selected portions of the communiqué:
Global economy. The global recovery is gaining strength but remains vulnerable. We discussed the significant risks to the outlook and decided to take necessary actions to strengthen the recovery. Credible actions are needed to accelerate progress in addressing challenges to financial stability and sovereign debt sustainability, and to ensure timely fiscal consolidation in advanced economies, whilst taking steps to avoid overheating in emerging market countries, and dealing with risks from higher commodity prices. We also underscore the importance of employment creation for medium-term sustainability. Against this background, the immediate economic impact of the tragic events in Japan and of developments in some Middle Eastern and North African countries also warrants close attention. As policies can have significant cross-border effects, we commit to continue to work together to address policy spillovers and to secure robust and balanced global growth.
Global financial stability. We are committed to accelerate efforts to strengthen the resilience of the financial sector and its ability to support economic recovery. Further progress is needed to address excessive financial risk taking and moral hazard, and strengthen supervision and regulation in financial centers. Recent international agreements on enhancing financial regulation must now be implemented and accompanied by more effective supervision. More cooperation and progress are needed to address risks posed by global systemically important financial institutions, including through heightened prudential standards, and on cross-border resolution. We welcome IMF contributions in these areas and on macro-prudential policy frameworks, as well as upcoming Financial Sector Assessment Program reports on economies with systemic financial sectors. We call for enhanced financial sector oversight of risks related to shadow banking activities and agree to maintain momentum to tackle noncooperative jurisdictions. We welcome the update on the data gaps initiative and look forward to concrete progress.