Bretton Woods Committee Members Play Advisory Role in IMF Exceptional Access Lending Framework Reforms

On January 20th, 2016, the IMF Executive Board approved reforms to the IMF’s exceptional access lending framework as part of a multi-year work program in which the IMF staff is reassessing its lending practices around sovereign debt. These recently approved reforms were initially put forward in a 2015 staff paper “The Fund’s Lending Framework and Sovereign Debt – Further Considerations,” and notably eliminate the “systemic risk exemption” that was introduced to the framework in 2010.

As indicated in the recent IMF press release announcing the decision, “IMF staff consulted with numerous stakeholders, including market participants, in the course of its work on the reforms,” including a cross-section of the Committee’s private sector leaders, policy experts, and academics. Last year (February 2015), a group of approximately 25 Bretton Woods Committee members held a private roundtable discussion with senior International Monetary Fund (IMF) officials – including IMF General Counsel Sean Hagan and then Economic Counsellor, Olivier Blanchard – to reassess the IMF’s role in sovereign debt crises. The roundtable was moderated by William R. Rhodes and the dialogue specifically focused on the proposals floated by IMF staff in its June 2014 report to reform the Fund’s exceptional access framework and eliminate the systemic exemption established in 2010.

The Committee looks forward to continuing to engage with the Fund in an advisory capacity as it moves into the final stage of its work program on sovereign debt restructuring and considers issues relating to debtor-creditor engagement, including the Fund’s lending into arrears policy.