Agence France Press. The choice of French Finance Minister Christine Lagarde to be the first woman to head the International Monetary Fund was widely applauded Tuesday, but critics assailed the secretive process that kept in place Europe's 65-year lock on the position. 6/29/2011
The official candidates for the position of managing director of the International Monetary Fund (IMF) have now emerged, but their positions on important topics facing the Fund are not yet clear. Civil society groups set out four pre-requisites for a new head of the IMF in April, including experience running intergovernmental institutions, independence, personal characteristics, and understanding of key issues.
A test of the first three areas is possible from looking at the candidates’ background, but for the last of these, their views are not clear. The IMF still needs fundamental reform if it is to be relevant to the global economy of the 21st century and to operate in the interests of ordinary people all over the world. We believe there are 4 key areas where these candidates must answer questions and that these questions should be answered in a public debate among the candidates.
High-Level Panel on the Governance of the Financial Stability Board
At the height of the international financial crisis, following the G-20 summit in London in 2009, from the Financial Stability Forum a new body—the Financial Stability Board (FSB)—has been established. Comprising an enlarged membership, the FSB is charged with an expanded mandate to formulate and oversee the implementation of regulatory, supervisory and other financial sector policies. It does so by acting as a convening forum for national authorities responsible for financial stability in significant financial centers, international financial institutions, sector-specific international groupings of regulators and supervisors, and central bank experts.
This High-Level Panel initiative, coordinated by the Brookings Institution and funded by U.S. Connect, is part of a wider project that brings together three major institutions—the African Economic Research Consortium, New Rules for Global Finance, and the Brookings Institution itself—to examine and promote efforts towards global regulation of the financial system that is effective, inclusive, transparent and accountable.
Despite the growing importance of the Financial Stability Board, there is extremely limited knowledge as to how it operates and how it is governed. The objective of this initiative is to set up a High-Level Panel to evaluate the current FSB governance framework, on the basis of standards to be formulated by the Panel itself. These may include, for instance, actual outcomes vis-à-vis the FSB's own Charter; transparency; arrangements to ensure that access to the FSB for non-financial stakeholders is comparable to that for financial sector stakeholders; the suitability for the FSB of an Independent Evaluation Office similar to the IMF's IEO; possible constituency or rotational representation for non-represented countries; and relationships with international organizations and forums such as, for instance, the BIS, the IMF and the G20.
Output & Organization of Work
The Panel will publish its analysis and recommendations in a final report. To facilitate its deliberations, the Panel will rely on preparatory research and experts' meetings. Domenico Lombardi, project's director, will summarize preparatory research in an issues paper.
Timeframe and Output
The issues paper will be finalized for the Panel by the early summer of 2011. The Panel will formulate a summary options paper by September 2011 that will be presented at the margins of the ensuing Annual Meetings of the IMF and the World Bank in a public event at the Brookings Institution.
Time requirements for participating in the Panel are expected to be limited and panelists will be able to rely on some logistical and scholarly support.
Composition of the Panel
The composition of the Panel will reflect the following criteria:
1. The Panel will exhibit internationally-recognized expertise on the governance of multilateral institutions, as well as of other comparable entities.
2. The Panel will be able to draw from a wide range of background and experience by including academics, think-tank scholars, practitioners, and civil society actors.
3. The Panelists will deliberate with the utmost independence and integrity. In so doing, they will have no reporting duties to their respective institutions. As a rule, Panelists cannot be employees of the FSB or members sitting on the FSB's own governance bodies.
4. Based on such criteria, the Panel will aim towards an adequate geographical balance across various regions, as well as between advanced and emerging and developing economies.
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