US’ Paulson urges diligent IMF forex surveillance

Conferences

The International Monetary Fund should sharpen its focus on currency exchange rate surveillance, challenges posed by sovereign wealth funds and supporting global financial market stability, US Treasury Secretary Henry Paulson said on Saturday.

Paulson said the IMF, in implementing a new surveillance regime, must use clear analytics and make strong judgments on exchange rate policies, “particularly where currencies are not set by market forces in deep, liquid markets.” “The IMF’s implementation of the new surveillance decision is still a work in progress,” he said in prepared remarks before the IMF’s steering committee in Washington. “Strengthened implementation of this core mandate is integral to IMF legitimacy; insufficient progress would put success of the broader modernization effort at risk.” Paulson also repeated his long-standing call for continued progress in reforming the IMF’s governing structure, including a smaller, more streamlined board, with gradual reductions to 20 seats from 24 currently by 2012. “The board is simply too costly and a smaller and more streamlined board could focus more strategically on the management of the institution and less on the voluminous crush of papers,” he said.

Paulson welcomed the IMF’s work on development of a set of best practices for rapidly growing sovereign wealth funds, and said it was important for the fund to work with both sovereign wealth fund countries and countries receiving the investments. The US Treasury secretary also said he supported the recommendations of the multi-nation Financial Stability Forum, unveiled on Friday, to improve risk management, accounting, valuation of structured products, credit rating agencies and other responses to stress in the financial system. As a member of the FSF, the IMF should report information on financial stability risks to the forum and then incorporate the FSF’s conclusions into its currency surveillance work, Paulson said.

Regarding the global economy, Paulson said 2008 will be “more difficult” than recent years, with "headwinds coming from adjustments in the US economy, financial market stress, and higher than desirable inflation.” He said he was confident about long term US prospects and the resilience of capital markets, but “we must expect more bumps in the road.” “It took time to build up recent excesses and it will take time to work through the consequences,” Paulson said. (Reuters)

ADVERTISEMENT

Reforms to raise productivity would strengthen recovery - OE... Analysis

Reforms to raise productivity would strengthen recovery - OE...

Meeting called to address Pegasus spyware lacks quorum  Parliament

Meeting called to address Pegasus spyware lacks quorum 

Skanska commercial dev unit names new EVP of operations Hung... Appointments

Skanska commercial dev unit names new EVP of operations Hung...

Zsa Zsa Gabor's ashes buried in Budapest City

Zsa Zsa Gabor's ashes buried in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.