recommends that additional initiatives be investigated to enhance the potential positive impact of these dimensions of the safeguards assessment policy see Section III.
D. Panel’s Observations drawn from Stakeholder Engagements
17.
Interviewed central banks were in unanimous support of the safeguards assessment policy. They had an appreciation for the rationale of the policy, and the due
diligence work conducted in connection with Fund programs given the Fund’s resulting exposure to credit risk. These central banks stressed the valuable contribution of the policy
and confirmed that necessary changes were being effected at their respective institutions.
18. The safeguards process has facilitated change at central banks. Though some of
the changes brought about or facilitated by the policy may already have been contemplated or were in progress, the assessments appear to give strong impetus to reform processes. The
Fund’s involvement and persuasive influence appear to have provided central banks with additional leverage in their negotiations with the government, state ministries and other state
entities in such cases. That being said, safeguards assessment recommendations to amend elements of the legal framework which are not exclusively within the regulatory jurisdiction
of the central bank, are often a sticking point, especially where it is necessary to amend the national constitution andor the central bank legislation.
19. Interviewed central banks were also unanimous in declaring their commitment
to and pursuit of sound safeguards standards and practices. They were appreciative of the contribution by the safeguards assessment policy in this regard, and strongly supported
further enhancement of the policy. The banks indicated that in most instances, they were fully supportive of the recommendations contained in the safeguards assessment reports,
which bodes well for substantive buy-in and implementation. In a limited number of cases, especially where structural reforms are required to bring about greater central bank
autonomy, political-economy challenges may disrupt the process.
20. The central banks were keen for additional substantive input in certain areas.
Interviewed central banks considered that the policy needs to be extended beyond the current ELRIC framework. Governance and risk management were the two key areas
identified. There are some aspects where more clarity and customized guidance would be useful, such as autonomy of a central bank, central bank accountability, and fit and proper
requirements of central bank executive management including the governor and deputies. This would have an important impact by bringing some certainty to a range of important but
unsettled issues. The panel recognizes the work which safeguards staff already does in the governance area, but believes that staff needs to be more assertive and address this topic
more comprehensively.
4
4
The panel agrees that monetary policy falls outside the ambit of the safeguards policy.
21. Central banks were impressed with the professionalism, knowledge, expertise and
attitude of the FIN safeguards staff.
E. Panel’s Statistical Review of the Period April 2010 to June 2015
