Emergency cases may still occur, but Fund lending might be restricted to true emergency cases and not be used as an instrument without an emergency need. Under the strategic review, an important question is how the newly agreed framework for exceptionally large access to Fund credit could be strengthened in practice.
In this vein, does the proposed introduction of ”exceptional precautionary arrangements” contribute to a strengthening of market rules or rather a weakening? Would such a step towards imposing an insurer role on the IMF be compatible with the Fund’s “risk-free” liquidity financing mechanism that designates official reserves as the source of short-term Fund credit?