International Monetary Fund (IMF) Spring Meetings, 15–17 April 2011

Date 19/04/2011

The International Monetary and Financial Committee (IMFC) met on 16 April 2011 in connection with the IMF and World Bank Spring Meetings. The Swedish delegation included the Governor of the Riksbank, Stefan Ingves, the Minister for Finance, Anders Borg, and the Minister for International Development Cooperation, Gunilla Carlsson.

 

The aim of the IMFC meeting was to discuss current international issues and to provide guidance on the institution’s activities. Sweden's stance in current IMF issues is decided in consultation with the constituency of Nordic-Baltic countries, of which Sweden is a part.
 
During the IMFC meeting, the following topics, in particular, were discussed:

 

The Global Economy

According to the Economic Counsellor of IMF, Olivier Blanchard, the recovery from the economic and financial crisis is divided. In the advanced economies, growth is low and unemployment remains high, whereas growth is high and there are signs of incipient overheating in the emerging market economies. In addition to this, rising commodity and food prices constitute a threat to growth.
The advanced economies will face a number of problems in the future, and the downside risks outweigh the upside risks. Among other problems, structural unemployment is deemed to have increased, and unemployment is thus not expected to sink/decrease to the same level prevailing before the outbreak of the crisis. Furthermore, a number of countries are still suffering from housing markets problems. As well as this, indebtedness among states, banks and households must be decreased, which is expected to dampen demand for a long time to come. Better growth prospects and higher interest rates in the emerging market economies have attracted large inflows of capital. Even if free movement of capital   is basically positive, excessively large and volatile flows may pose a threat to financial stability.

 

The International Monetary System

The reform of the International Monetary System (IMS) is a prioritised issue during the French G20 Presidency, and this topic marked the discussion at the IMFC meeting, as the IMF is undertaking a large part of the analysis. The reform of the IMS entails improved surveillance, exchange rate issues, capital flows, reserve accumulation and global financial safety nets. These issues are interlinked and were discussed without any concrete decisions being taken. On the whole, this means that all countries must cooperate to strengthen the International Monetary System – among other reasons, to avoid exacerbating global imbalances.

 

What is the IMFC?

The International Monetary and Financial Committee (IMFC) is the policymaking body of the IMF. The Committee meets twice a year, once in the spring and once in the autumn, in connection with the IMF Annual Meetings, to discuss the development of the global economy and other issues relating to IMF's activities. The IMFC consists of 24 members, one central bank governor or finance minister from each member country or constituency in the IMF. Sweden is part of a constituency together with Denmark, Estonia, Finland, Iceland, Latvia, Lithuania and Norway.  Our constituency is currently represented by Norway in the IMFC. The Committee’s overall purpose is to stimulate international monetary cooperation, together with macroeconomic and financial stability.