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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (33376)	10/5/1998 5:22:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

CB, Abby's a one-trick pony. If she lasts long enough, that trick will start working again. MB

To: Ilaine who wrote (33376)	10/6/1998 12:20:00 AM
From: flickerful	Respond to of 132070

IMF/WORLD BANK: Two reluctant partners agree to be friends 6 oct 98 By Robert Chote The World Bank and the International Monetary Fund yesterday promised to spend more time talking to each other, as finance and development ministers discussed ways to improve co-ordination. The heads of the two institutions presented the committee with an updated version of the 1989 "concordat", which describes the responsibilities of each of them and mechanisms to resolve disagreements between them. The original concordat was drawn up in 1989, after an embarrassing public row when the Bank offered a $1.25bn loan to Argentina against the Fund's wishes. "Given the importance of structural factors as a source of macroeconomic instability, especially in a more integrated global economy. ..it is essential to have early and close co-ordination of the Fund's macroeconomic policy advice and the Fund's advice on structural issues," the new concordat says. The issue of co-ordination has been raised by problems assembling programmes for Asian countries in crisis. Particularly on financial sector reform, the Bank has appeared to respond too slowly while the Fund has acted too hastily. "On occasion there have been strains in collaboration," the new concordat concedes. The new concordat outlines a number of changes to enhance co-ordination, including the creation of a liaison committee spanning the Bank and Fund to discuss financial sector work. The organisations are also clarifying contact points, improving information sharing, promoting joint missions and endeavouring to promote "the culture of collaboration". But some officials are disappointed that they have shied away from any painful reallocation of responsibilities. The Bank is also concerned that it has been called upon to provide the sort of quick-disbursing, short-term liquidity support traditionally provided by the Fund. This increases the riskiness of its loan portfolio and thus potentially constrains further lending. The Group of Seven leading industrial countries insisted over the weekend that the Bank had to develop an "emergency capacity", although it said this should focus on its core areas of financial sector reform and support for vulnerable groups in society. The Bank has warned that providing more money in "emergency structural adjustment lending" might require a capital increase or other measures to boost its risk-bearing capacity. Conscious that the Fund is under pressure for its performance in handling the Asian crisis, the Bank's senior management is keen to distance itself from its neighbour across 19th Street as far as possible - emphasising its long-term development role. But the industrial countries are keen to find money for emergency finance wherever they can.