Rationale and Mandate for the External Expert Panel Review

II. P

ANEL ’ S R EVIEW OF THE S AFEGUARDS A SSESSMENT P OLICY

A. Rationale and Mandate for the External Expert Panel Review

5. Safeguards assessment reports are considered confidential documents and are not published. The reports are made available to the central bank and the Executive Director in whose constituency the borrowing member country belongs. The rationale for the confidentiality and restricted circulation of the reports derives from the due diligence nature of safeguards and the confidential institution-specific information in the reports, which can be highly sensitive. 6. The Executive Board receives a summary of key safeguards findings and recommendations in program country staff reports. In addition to the summary of findings and recommendations arising from individual safeguards assessments, on an ongoing basis, staff reports specify outstanding vulnerabilities in a central bank’s ELRIC and the history of safeguards assessments and monitoring thereof. Annually, a summary update paper is submitted to the Executive Board on safeguards assessments activities. 7. Since the Executive Board has access to limited information on safeguards assessments, it needs to have an independent source of advice. Accordingly, for the purpose of discharging its oversight responsibilities on the safeguards assessment policy, the Executive Board places reliance on the work done by an external expert panel in the periodic policy reviews. The panel’s review of the nature, coverage and quality of safeguards assessments and reports therefore constitutes a key input into the policy review. 8. The panel’s terms of reference are provided in Annexure 2. The panel’s principal objective is to provide the IMF Executive Board with advice on the conduct and focus of safeguards assessments and the operation of the risk-based monitoring framework. The panel is also expected to provide advice on the effectiveness of the safeguards assessment policy and the continued appropriateness of the ELRIC framework, taking into account the application of the framework and evolving governance and control practices. In addition, the panel assessed the current safeguards modalities and scope for efficiencies and streamlining, using a risk-based approach, in light of the improvements in central bank control frameworks since the policy was adopted.

B. Panel’s Review Approach and Methodology