This is also an issue that we are pursuing in our constituency. Until financial stability is covered by the articles, the members will have no obligation to discuss financial stability issues with the IMF and even less of an obligation to explain their choices in cases where they do not follow the Fund’s recommendations. Summary and concluding remarks As I said earlier, it is important to clarify the IMF’s role in the surveillance of the global financial system. My view is that the IMF is an institution that is well equipped to perform an independent and stringent analysis of the international financial system. An important aspect to discuss in this context is how to make the best use of the Fund’s risk analyses, advice and recommendations. First, it is important for the IMF to present clear and focused recommendations on global financial stability that are not too general. The IMF’s consolidated surveillance report has this aim. The report is wide ranging and may easily become toothless, but it has the potential to play a greater role in this context. Second, the IMF’s advice and recommendations will be ineffectual if the member countries do not comply with them. The follow-up of these recommendations must therefore be improved. The IMF has now said that the follow-up of advice and recommendations will become a permanent feature of the annual country reviews. Sweden welcomes this initiative and looks forward to its full implementation.
Svensson, L (2002), “The Inflation Forecast and the Loss Function”, CEPR Discussion Paper 3365. Svensson, L and Williams, N (2005), “Monetary Policy with Model Uncertainty: Distribution Forecast Targeting”, NBER Working Paper No. 11733. Weale, M (2014), “Slack and the labour market”, speech at the Thames Valley Chamber of Commerce, 20 March 2014, available at http://www.bankofengland.co.uk/publications/Documents/speeches/2014/speech716.pdf. Weale, M (2015), “Inflation: finely balanced risks”, speech at City and Islington Sixth Form College, 11 March 2015, available at http://www.bankofengland.co.uk/publications/Documents/speeches/2015/speech805.pdf. Yellen, J (2014), “Labor Market Dynamics and Monetary Policy”, speech given at the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole. 20  BIS central bankers’ speeches