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Unformatted text preview: http://www.treas.gov/press/releases/js4002.htm February 2, 2006 JS-4002 Remarks by Under Secretary for International Affairs Tim Adams At AEI Seminar Working with the IMF to Strengthen Exchange Rate Surveillance Introduction Let me thank Desmond Lachman and the American Enterprise Institute for inviting me to speak to this seminar on the IMF's role in foreign exchange surveillance. First, though, I want to discuss the overarching questions facing the Fund. The IMF is the world's central institution for global monetary cooperation. A strong IMF serves the interests of the United States and the world economy. Over the past decades, the Fund has done remarkably well, tackling the debt crises of the 1980s, helping transform the former Soviet Union and Central Europe, and addressing the emerging market crises of the 1990s. The IMF is indispensable. But in a rapidly evolving global economic and financial system, the Fund faces the continuous challenge of re- tooling itself. Already, this decade, many new and fundamental questions have emerged regarding the IMF's future and relevance. Will the global community resolve imbalances in an orderly manner? With large emerging market countries across the world putting in place sound macroeconomic policy frameworks, adopting pro- growth policies, relying on private finance, and accumulating large stocks of foreign exchange reserves, will the Fund be needed as a major balance of payments lender? Crises will always happen, but can the Fund do better on ex ante crisis prevention? When crises erupt, how can they be best managed, especially when the dynamics of global capital flows are not fully appreciated? IMF transparency has been substantially enhanced, but is there more to be done? The Fund's major shareholders and Management are tackling these issues and many others through the Managing Director's Strategic Review. The Managing Director will soon bring forward his ideas on how to strengthen the Fund's surveillance activities including exchange rate surveillance and broader integration of financial markets issues into surveillance. We welcome this exercise and we look forward to working with him constructively to achieve concrete results. Today, I would like to offer my own thoughts on the very high priority issue of the IMF's role in foreign exchange surveillance. My objective is to table ideas for reforming IMF foreign exchange surveillance procedures to make surveillance more effective, to contribute to the debate which the Managing Director's Strategic Review is stimulating, and to help galvanize action by the Fund's shareholders who set the tone and direction for the IMF to better allow Rodrigo de Rato and the IMF's excellent staff to play their role as the world's preeminent monetary institution....
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- Spring '06
- International Economics