There is an update on the G20 and an article by New Rules' Executive Director Jo Marie Griesgraber on the importance of the Financial Stability Board.
To read the E-Newsletter, click here.
News
Date of the conference: December 12–13, 2013
Place: IMF, Washington, DC
Deadline for submission: Febrary 1, 2013
Conference Organizers: Chris Papageorgiou (Chair), Nikola Spatafora, Camelia Minoiu.
The conference, sponsored by the IMF and funded by the UK Department for International Development, aims to provide a forum for discussing innovative theoretical and empirical research on the key macroeconomic challenges facing low-income countries, and to facilitate the exchange of views among researchers and policymakers.
One of the key goals is to increase the attention devoted to macroeconomic issues in low-income countries. To this end, submissions from researchers who have not previously focused on these economies are strongly encouraged.
In November 2011, the FSB published a set of policy measures to address the systemic and moral hazard risks that are associated with systemically important financial institutions (SIFIs). The FSB initially identified a list of 29 globally systemically important financial institutions (G-SIBs), noting that the list will be updated annually – based on new data – and published by the FSB every November. In the updated list, two new banks were added (BBVA and Group BPCE) and three banks were removed (Banque Populaire CdE, Commerzbank, and Dexia), reducing the number of G-SIBs from 29 to 28. The new update will be in November 2013.
The updated list
- Citigroup
- Deutsche Bank
- HSBC
- JP Morgan Chase
- Barclays
- BNP Paribas
- Bank of America
- Bank of New York Mellon
- Credit Suisse
- Goldman Sachs
- Mitsubishi UFJ FG
- Morgan Stanley
- Royal Bank of Scotland
- UBS
- Bank of China
- BBVA
- Groupe BPCE
- Group Crédit Agricole
- ING Bank
- Mizuho FG
- Nordea
- Santander
- Société Générale
- Standard Chartered
- State Street
- Sumitomo Mitsui FG
- Unicredit Group
- Wells Fargo
To read the entire report, click here
Dear Friends and Colleagues,
One of the objectives of this newsletter is to analyze the activities of international financial institutions in the context of human rights, poverty reduction and other global development objectives. Too often the debates over global financial reform overlook or dismiss the impact on human rights and poverty. The complexities of global financial flows, international taxation and financial regulations can blur their impact on the poor, but they are intimately connected. With the cost of the financial crisis estimated at $2.8 trillion and another$21-32 trillion estimated to be hidden offshore, available financing for development has been dwarfed or depleted. Furthermore, the US too-big-to-fail banks are even bigger today than before the financial collapse in 2008 - solidifying their skewed influence, through excessive speculation, in commodities markets (especially food and fuel) which has severe consequences for developing countries and their populations.
Contents
IMF Governance and Impact:
IMF and Emerging Economies (p. 2)
IMF Conditionality Review (p. 2-3)
IMF NGO Network (p. 3)
Financial Stability Board:
Breakdown of the FSB Plenary meeting in Tokyo (p. 4)
The FSB and Regional Participation (p. 4-5)
FSB and OTC Derivatives Reform (p. 5)
Tax Reform:
Transfer Pricing and Developing Countries (p. 6)
The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development held its eighty-eighth meeting in Tokyo, Japan, on October 11, 2012 with Mr. P. Chidambaram, Minister of Finance of India, in the Chair, Mr. José Antonio Meade, Secretary of Finance and Public Credit of Mexico, as First Vice-Chair, and Dr. Ashraf El-Araby, Minister of Planning and International Cooperation of Egypt, as Second Vice-Chair.
To read the entire press release, click here
The October 2012 IMF global financial stability report discovered increased risks to the global financial system -- with the the euro crisis being its main concern. The report found that emerging markets have successfully navigated global shocks thus far, but need to guard against future shocks as they manage a slowdown in growth. Furthermore, the GSFR examined whether regulatory reforms have improved the financial system; it determined that progress has been limited since most reforms are in the early stages of implementation and since crisis intervention methods are still in use.
To read more, click here
The Poverty Reduction and Growth Trust (PGRT) is intended to help finance low income countries (LICs) with balance of payment problems. Both the effectiveness and adequate funding of the PRGT have been a major concern. Recently, Jubilee Network USA and other organizations have been pushing the IMF to distribute its excess profits from its gold sales to the PRGT. This year, these efforts resulted in the IMF approving $3.8 billion in excess profits to the PRGT and extending its zero percent interest rate to 2014. Congratulations to Jubilee and all the participating organizations!
Since gold profits technically belong to the member states, these profits cannot be distributed directly to the PRGT. As part of the IMF agreement to fund the PGRT, members have voluntarily agreed to subsidize lending to low income countries by contributing their share of the profits. According to the IMF, the distribution will be effective when members pledge enough to subsidize 90 percent of total amount ($3.8 billion). And as of October 12, 134 countries, representing 90.35 percent, have made this pledge – satisfying the criteria for distribution. This boost to the PRGT’s funds is very encouraging, but will it be enough to help LICs combat macroeconomic shocks?
The IMF estimates that the PRGT will need between 1.5 - 2.6 billion annually over the next decade and expects the $3.8 billion in profits to raise its annual capacity from $1 billion to $1.9 billion. The IMF anticipates that this will keep the PRGT sustainable for the next decade. However, given the IMF’s $36.7 billion loan to Greece this year, $1.9 billion per year seems inadequate to address the potential instabilities of more than 70 low income countries.
Although the Greek loan may be de facto assistance to stabilize the Eurozone (and to some extent the global economy), the IMF will still need to explain why Greece is eligible for more than 2000 percent of its quota and LICs are not - even through the PRGT facilities. This is a problem that is often voiced by finance ministers from LICs. Furthermore, the PRGT ties LICs to the IMF so closely and for so long that the function of the PRGT itself is problematic. For a more complete and deeper evaluation of the PRGT with appropriate recommendations, please read “Enhancing the IMF’s focus on Growth and Poverty Reduction in Low Income Countries."
For the IMF's most recent press release, click here.
Read the IMF's September Review of Facilities for Low-Income Countries.
The IMF is pushing Europe to write-down Greek debt. This would be unprecedented posturing by the International Monetary Fund. The preferential treatment toward an ailing Europe might not help the IMF's efforts to improve its misbranding by some IMF Executive Directors from emerging markets - which have referred to it this year as the "European Monetary Fund." Nevertheless, the European debt crisis has not subsided and politics, as well as shallow public finances, continue to threaten the financial stability not just in Europe, but every region. Either way, if the IMF successfully pushes for a write-down of Greek debt, a tall order given Germany's opposition, other IMF members will have fresh ammunition to bolster their own cases for debt restructuing.
To read Bloomberg's report on the announcement, click here.
The IMF is considering a formula review. On July 19, 2012, the Executive Board of the International Monetary Fund (IMF) held further discussions on the review of the quota formula.
To read the complete IMF article please click here
For more information on the IMF Quota Reform, see Impact of the 2010 IMF Quota Reform: Winners, Losers, and Realignments
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