13 Macro-prudential measures have little traction against the deluge of inflows – Spain had a housing boom despite its countercyclical provisioning. Recipient countries should adjust, of course, but credit and flows mask the magnitude and timing of needed adjustment.
In this respect we call upon all donors to secure a sufficient replenishment of IDA-16, for which negotiations will start soon. The second phase of voice and participation reform should be concluded within the agreed timeframe. This reform should be based on a widely accepted measure for countries’ relative economic weight, but should also take into account members’ contributions to IDA.