At its Annual Meeting in Singapore in September 2006 (IMF, 2006d), the IMF recognized that the quota of four countries – China, Korea, Mexico and Turkey – had to be raised on an ad-hoc basis. The quotas of these four countries were raised by 1.8% of total current quotas. China, Korea, Mexico and Turkey were the only countries that were underrepresented both on the basis of the five existing quota formulas and on the basis of all four variables that are currently used in these formulas. Moreover, the Executive Board will work on a new quota formula which should be completed no later than by the spring 2008 meeting of the Interna-tional Monetary and Financial Com-mittee (IMFC). The new quota
for-mula should give significantly higher weight to GDP while ensuring that the other variables, in particular the openness of members’ economies, will also play an important role. On the basis of the new formula, the Board of Governors will decide on further quota increases no later than by the 2008 Annual Meeting for those countries that have requested that their quotas be increased with a view to achieving a further alignment that takes the individual countries’ rela-tive positions in the world economy into account. Furthermore, the Exe-cutive Board has been requested to make a proposal for a doubling – at least – of basic votes for each member and to ensure that the ratio of the sum of basic votes to the overall sum of votes will remain constant in the event of any further changes in mem-bers’ total voting power.
In addition, the IMFC agreed on an increase in staff resources for those constituencies that have to deal with a heavy workload. Furthermore, the two African Executive Directors, who represent 43 countries, may also appoint a second Alternate Executive Director.
Considering this resolution and further reports by the Managing Di-rector, a reform of the IMF is well under way. The IMF recognized that IMF surveillance should put greater weight on analyzing and discussing global economic issues. By taking ac-count of international spillovers, sur-veillance should in future be multilat-eral rather than purely country-spe-cific. Exchange rates and policies should also be the focus of renewed interest. Whether the IMF will have the actual power and ability to effec-tively cope with this expanded role remains to be seen.
Reforming the International Monetary Fund – Some Reflections
There is no doubt that IMF quotas will have to be adjusted to take ac-count of the changing economic weight of many member countries in the world economy. As mentioned above, negotiations on a new quota formula started after the 2006 An-nual Meeting in Singapore. Low in-come countries should be given more basic votes in order to prevent the IMF from loosing legitimacy. How-ever, with the IMF’s intention to put greater weight on GDP in the new quota formula the stage is set for com-plex, difficult and time-consuming negotiations.
The IMF should furthermore streamline existing procedures for providing assistance to emerging market economies by increasing ex-isting credit-lines. Currently these procedures are still prone to internal and external vulnerabilities. Instead of introducing new facilities, the easi-est option would be to increase their quotas.
As far as Europe is concerned, and in light of the fact that it is un-likely that a single euro area chair on
the IMF’s Executive Board will be es-tablished any time soon, closer coor-dination and a better focus on the is-sues on the Executive Board’s agenda by all the various groups and forums tasked to follow IMF issues will be essential.
Finally, the IMF will need to re-form its financing system and budget-ing procedures to ensure that expen-ditures will be adequately curtailed to enable the Fund to work efficiently despite income shortfalls, which might well be not transitory but of a permanent nature.
The fact that for sixty years the IMF has been able to change with the times and the sometimes violent shift of the international monetary and financial system all the while coping with new tasks while keeping its core functions intact and relevant allows considerable scope for optimism that it will continue to weather present and future crises – both institution-ally, for its own sake, and externinstitution-ally, for the benefit of the international financial and monetary system.
Cooper, R. N. et al. 2000. Report to the IMF Executive Board of the Quota Formula Review Group. IMF, April.
Evans, P. and M. Finnemore. 2001. Organizational Reform and the Expansion of the South’s Voice at the Fund. G24. Technical Group Meeting. Washington D.C.
Gold, J. 1972. Voting and Decision in the International Monetary Fund. IMF. Washington D.C.
Horng, D. CH. 2005. The ECB’s Membership in the IMF: Legal Approaches to Constitu-tional Challenges. In: European Law Journal 11(6).
IMF. 2000. Staff Commentary on the External Review of the Quota Formulas. June.
IMF. 2005a. Selected Decisions and Selected Documents of the IMF Twenty-Ninth Issue.
IMF. 2005b. Technical Assistance. September.
IMF. 2006a. A Medium-Term Strategy for the IMF: Meeting the Challenge of Globalization.
IMF. 2006b. IMF Surveillance. August.
IMF. 2006c. Quotas-Updated Calculations. August.
IMF. 2006d. Communiqué of the International Monetary Fund and Financial Committee of the Board of Governors of the International Monetary Fund. September.
Kelkar, V., V. Yadav, and P. Chaudry. 2004. Reforming the Governance of the IMF.
In: The World Economy 27(5).
Leech, D. 2002. Voting Power in the Governance of the IMF. Annuals of Operations Research 109(1–4).
Leech, D. and R. Leech. 2005. Voting Power Implications of a Unified European Repre-sentation at the International Monetary Fund. Warwick Economic Working Paper 720.
Rapkin, D. P. and J. R. Strand. 2006. Reforming the IMF’s Weighted Voting System. In:
The World Economy 29(3).
Truman, E. M. 2006a. Reforming the IMF for the 21st Century. Institute for International Economics. Special Report 19.
Truman, E. M. 2006b. A Strategy for IMF Reform. Policy Analysis in International Eco nomics 77. Institute for International Economics.
Van Houtven, L. 2002. Governance of the IMF-Decision Making, Institutional Oversight, Transparency, and Accountability. International Monetary Fund Pamphlet Series 53.
Van Houtven, L. 2004. Rethinking IMF Governance. Finance and Development. 41(3).
Woods, N. 1999. Good Governance in International Organizations. Global Gover-nance 5(1).
World Bank. 2006. World Development Indicators.
N o t e s
A-Trust A-Trust Gesellschaft für Sicherheitssysteme im elektronischen Datenverkehr GmbH
ATX Austrian Traded Index
BCBS Basel Committee on Banking Supervision (BIS) BIC Bank Identifier Code
BIS Bank for International Settlements BOP balance of payments
BSC Banking Supervision Committee (ESCB) CACs collective action clauses
CEBS Committee of European Banking Supervisors (EU) CEE Central and Eastern Europe
CEECs Central and Eastern European countries CESR Committee of European Securities Regulators CIS Commonwealth of Independent States CPI consumer price index
EBA Euro Banking Association
EBRD European Bank for Reconstruction and Development EC European Community
ECB European Central Bank
Ecofin Council of Economic and Finance Ministers (EU) EEA European Economic Area
EFC Economic and Financial Committee (EU) EIB European Investment Bank
EMS European Monetary System EMU Economic and Monetary Union EONIA Euro OverNight Index Average ERM II Exchange Rate Mechanism II (EU) ERP European Recovery Program ESA European System of Accounts
ESAF Enhanced Structural Adjustment Facility (IMF) ESCB European System of Central Banks
ESRI Economic and Social Research Institute EU European Union
EURIBOR Euro Interbank Offered Rate
Eurostat Statistical Office of the European Communities FATF Financial Action Task Force on Money Laundering Fed Federal Reserve System
FMA Financial Market Authority (for Austria) FOMC Federal Open Market Committee (U.S.A.) FSAP Financial Sector Assessment Program (IMF) FWF Fonds zur Förderung der wirtschaftlichen
Forschung – Austrian Science Fund GAB General Arrangements to Borrow GATS General Agreement on Trade in Services GDP gross domestic product
GNP gross national product
GSA GELDSERVICE AUSTRIA Logistik für Wertgestionierung und Transportkoordination GmbH (Austrian cash services company) HICP Harmonized Index of Consumer Prices HIPC Heavily Indebted Poor Countries IBAN International Bank Account Number IBRD International Bank for Reconstruction and
ICT information and communication technology IDB Inter-American Development Bank
IFES Institut für empirische Sozialforschung GesmbH (Institute for Empirical Social Research, Vienna) ifo ifo Institute for Economic Research, Munich
ISO International Organization for Standardization IWI Industriewissenschaftliches Institut – Austrian
Institute for Industrial Research JVI Joint Vienna Institute
LIBOR London Interbank Offered Rate M3 broad monetary aggregate M3 MFI monetary financial institution MRO main refinancing operation MoU memorandum of understanding
NACE Statistical Classification of Economic Activities in the European Community
NCB national central bank
OeBS Oesterreichische Banknoten- und Sicherheitsdruck GmbH – Austrian Banknote and
Security Printing Works
OECD Organisation for Economic Co-operation and Development
OeKB Oesterreichische Kontrollbank (Austria’s main financial and information service provider for the export industry and the capital market)
OeNB Oesterreichische Nationalbank (Austria’s central bank)
OPEC Organization of the Petroleum Exporting Countries ÖBFA Austrian Federal Financing Agency
ÖNACE Austrian Statistical Classification of Economic Activities
POS point of sale
PRGF Poverty Reduction and Growth Facility (IMF) RTGS Real-Time Gross Settlement
SDR Special Drawing Right (IMF)
SDRM Sovereign Debt Restructuring Mechanism (IMF) SEPA Single Euro Payments Area
SPF Survey of Professional Forecasters
STEP2 Straight-Through Euro Processing system offered by the Euro Banking Association
STUZZA Studiengesellschaft für Zusammenarbeit im Zahlungsverkehr G.m.b.H. – Austrian Research Association for Payment Cooperation
S.W.I.F.T. Society for Worldwide Interbank Financial Telecommunication
TARGET Trans-European Automated Real-time Gross settlement Express Transfer
Treaty refers to the Treaty establishing the European Community
UNCTAD United Nations Conference on Trade and Development
UNO United Nations Organization VaR Value at Risk
WBI Wiener Börse Index WEF World Economic Forum
WIFO Österreichisches Institut für Wirtschaftsforschung – Austrian Institute of Economic Research
WIIW Wiener Institut für internationale
Wirtschaftsvergleiche – The Vienna Institute for International Economic Studies
WKO Wirtschaftskammer Österreich – Austrian Federal Economic Chamber
WTO World Trade Organization
x = No data can be indicated for technical reasons .. = Data not available at the reporting date
0 = The numerical value is zero or smaller than half of the unit indicated Discrepancies may arise from rounding.
High Price Competitiveness of Austrian Exporters and Recovery of Private Consumption Support Economic Activity
Economic Outlook for Austria from 2005 to 2007 (December 2005) Gerhard Fenz, Martin Schneider
The Natural Rate of Interest – Concepts and Appraisal for the Euro Area Jesús Crespo Cuaresma, Ernest Gnan, Doris Ritzberger-Grünwald
Price Setting in Austria – Results from the Eurosystem Inflation Persistence Network
Claudia Kwapil, Fabio Rumler
A Disaggregated Approach to Analyzing Public Finances in Austria Bernhard Grossmann, Doris Prammer
The European Integration Process – A Changing Environment for National Central Banks
Fiscal Spending Rules in Europe
Bernhard Grossmann, Eva Hauth, Silvia Pop Issue Q1/06
Economic Outlook Improves in Euro Area
Inflation Pressure Persists Due to High Energy Prices Andreas Breitenfellner, Gerhard Fenz, Thomas Reininger
The Potential Growth Prospects of the Austrian Economy – Methods and Determinants
Jürgen Janger, Johann Scharler, Alfred Stiglbauer Oil Price Shock, Energy Prices and Inflation – A Comparison of Austria and the EU
Markus Arpa, Jesús Crespo Cuaresma, Ernest Gnan, Maria Antoinette Silgoner Reform of the Stability and Growth Pact
Leopold Diebalek, Walpurga Köhler-Töglhofer, Doris Prammer High Employment with Low Productivity?
The Service Sector as a Determinant of Economic Employment Andreas Breitenfellner, Antje Hildebrandt
The Financial System and the Institutional Environment as Determinants of Economic Performance: Austria in Comparison
Price Setting and Inflation Persistence in Austria Claudia Kwapil, Fabio Rumler
List of Studies Published in Monetary Policy & the Economy
Domestic Demand and Strong Exports Stimulate the Economy Economic Outlook for Austria from 2006 to 2008 (June 2006) Christian Ragacs, Johann Scharler
Is Germany’s Influence on Austria Waning?
Synchronization and Transmission of Cyclical Shocks Gerhard Fenz, Martin Schneider
The Lisbon National Reform Programs:
New Ideas for Austria’s Economic Policy Jürgen Janger
The Austrian Pension System –
How Recent Reforms Have Changed Fiscal Sustainability and Pension Benefits Markus Knell, Walpurga Köhler-Töglhofer, Doris Prammer
Austrian Households’ Financial Wealth:
An Analysis Based on Microeconomic Data
Christian Beer, Peter Mooslechner, Martin Schürz, Karin Wagner How Are Payments Made in Austria?
Results of a Survey on the Structure of Austrian Households’ Use of Payment Means in the Context of Monetary Policy Analysis
Peter Mooslechner, Helmut Stix, Karin Wagner
Globalization: Opportunities and Challenges for the World, Europe and Austria – Summary of the 34th Economics Conference
Jürgen Janger, Markus Knell, Wolfgang Pointner Strategies for Growth and Employment in Austria Christian Beer, Jürgen Janger, Alfred Stiglbauer Issue Q3/06
Euro Area Economy Gains Strength
Inflation Remains High Owing to Energy Component Wolfgang Pointner, Martin Schneider, Josef Schreiner
Globalization, Import Prices and Producer Prices in Austria Ernst Glatzer, Ernest Gnan, Maria Teresa Valderrama
Employment Protection Regulations and Their Impact on Employment Wolfgang Pointner
The (New) OECD Jobs Study: Introduction and Assessment Alfred Stiglbauer
How Do Austrians Pay for Online Purchases?
Helmut Stix, Karin Wagner
Austria’s Economy Will Continue to Grow Dynamically in 2007 Economic Outlook for Austria from 2006 to 2008 (December 2006) Gerhard Fenz, Martin Schneider
Limited Pass-Through from Policy to Retail Interest Rates:
Empirical Evidence and Macroeconomic Implications Claudia Kwapil, Johann Scharler
Globalization, Inflation and Monetary Policy Ernest Gnan, Maria Teresa Valderrama
The New Keynesian Philipps Curve for Austria – An Extension for the Open Economy
Revised and New Competitiveness Indicators
for Austria Reflect Improvement Trend since EMU Accession Walpurga Köhler-Töglhofer, Christa Magerl, Peter Mooslechner Reforming the International Monetary Fund – Some Reflections Herbert Gratz, Harald Grech
of the Oesterreichische Nationalbank
For further details see www.oenb.at
Monetary Policy & the Economy quarterly
This quarterly publication, issued both in German and English, offers analyses of current cyclical developments, medium-term macroeconomic forecasts and studies on central banking and economic policy topics. It also summarizes the findings of macroeconomic workshops and conferences organized by the OeNB.
Statistiken – Daten & Analysen quarterly
This publication contains brief reports and analyses focusing on Austrian financial institutions, cross-border transactions and positions as well as financial flows. The contributions are in German, with executive summaries of the analyses in English. The statistical part covers tables and explanatory notes on a wide range of macroeconomic and financial indicators. The tables and additional information and data are also available on the OeNB’s website in both German and English. This series also includes special issues on selected statistics topics published at irregular intervals.
The quarterly English-language newsletter is published only on the Internet and informs an international readership about selected findings, research topics and activities of the OeNB’s Economic Analysis and Research Section. This publication addresses colleagues from other central banks or international institutions, economic policy researchers, decision makers and anyone with an interest in macroeconomics. Furthermore, the newsletter offers information on current publications, studies or working papers as well as events (conferences, lectures and workshops).
For further details see www.oenb.at/econ.newsletter
Financial Stability Report semiannual
Issued both in German and English, the Financial Stability Report contains first, a regular analysis of Austrian and international developments with an impact on financial stability and second, studies designed to provide in-depth insights into specific topics related to financial market stability.
Focus on European Economic Integration semiannual
The English-language publication Focus on European Economic Integration is the successor publication to Focus on Transition (published up to issue 2/2003).
Reflecting a strategic regional research priority of the OeNB, this publication is a channel for communicating our ongoing research on Central and Eastern European countries (CEECs) as well as Southeastern European (SEE) countries ranging from economic country studies to studies on central banking issues and related topics. One of the purposes of publishing theoretical and empirical studies in the Focus on European Economic Integration, which are subject to an external refereeing process, is to stimulate comments and suggestions prior to possible publication in academic journals.
Proceedings of OeNB Workshops three to four issues a year
The Proceedings of OeNB Workshops were introduced in 2004 and typically comprise papers presented at OeNB workshops at which national and international experts, including economists, researchers, politicians and journalists, discuss monetary and economic policy issues. Workshop proceedings are available in English only.
Working Papers about ten papers a year
The OeNB’s Working PaperWorking PaperWorking Paper series is designed to disseminate, and provide a series is designed to disseminate, and provide a platform for discussing, findings of OeNB economists or outside contributors on topics which are of special interest to the OeNB. To ensure the high quality of their content, the contributions are subjected to an international refereeing process.
Economics Conference (Conference Proceedings) annual
The Economics Conference hosted by the OeNB represents an important international platform for exchanging views and information on monetary and economic policy as well as financial market issues. It convenes central bank representatives, economic policymakers, financial market players, academics and researchers. The conference proceedings comprise all papers presented at the conference, most of them in English.
Conference on European Economic Integration
(Conference Proceedings) annual
This series, published in English by a renowned international publishing house, reflects presentations made at the OeNB’s annual conference on Central, Eastern and Southeastern European issues and the ongoing EU enlargement process (formerly East-West Conference).
For further details see ceec.oenb.at
Periodical Publications of the Oesterreichische Nationalbank
Annual Report annual
The Annual Report of the OeNB provides a broad review of Austrian monetary policy, economic conditions, new developments in the financial markets in general and in financial market supervision in particular as well as of the OeNB’s changing responsibilities and its role as an international partner in cooperation and dialogue. It also contains the OeNB’s financial statements.
Intellectual Capital Report annual
The Intellectual Capital Report has been published since 2003 as a review of the OeNB’s intellectual capital and its use in the OeNB’s business processes and services. The report provides an integrated view of the strategically important management of human, relational, structural and innovation capital;
it clarifies the relationships between different types of capital and describes various determinants that influence the OeNB’s intellectual capital. The findings of the report serve to assess the consistency of the OeNB’s intellectual capital with its knowledge-based strategic orientation.