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IMF Report on Ireland

  • 14-07-2010 9:31pm
    #1
    Welease
    Registered Users, Registered Users 2 Posts: 3,834 ✭✭✭


    Many wanted IMF in.. Many wanted IMF out.. Many wanted FF in.. Many wanted FF out.. Me? I just wanted to stop my favourite t-shirts shrinking in the washing machine..

    But either way.. and I'm surprised noone posted this earlier, the IMF comments on Ireland were released today, and they seem to be happy with NAMA so far... as per the government.. much done .. much more to be done..

    Personal Opinion - The drastic differnces in strategy that people were proclaiming, don't appear to be that different in the end if the IMF had taken control /discuss

    (and for the usual antagonists.. no I am not a FF supporter (or FG/or Labour etc. for that matter))

    "
    Executive Board Assessment
    Executive Directors considered that the authorities’ decisive measures to support the banking sector and advance fiscal consolidation have helped gain policy credibility and stabilize the economy. Directors encouraged the authorities to sustain these efforts and actively manage risks going forward.

    Directors noted that vulnerabilities remain elevated as evidenced by continued pressures in sovereign debt and bank funding markets. With limited fiscal resources for dealing with contingencies, maintaining a steady policy course will require effective mechanisms for oversight and transparency, and high-quality communication to minimize risks and sustain market confidence.

    Directors concurred with staff’s analysis that the speed of the recovery is likely to be moderate with relatively limited growth and high unemployment. Growth prospects are weighed down by the ongoing correction of pre-crisis imbalances. The unwinding of these imbalances—arising from rapid credit growth, inflated property prices, and high wage and price levels—could limit the upside potential. In this context, Directors noted that structural reforms aimed at regaining competitiveness and boosting potential output are necessary to put the recovery on a sustainable track.

    Recognizing that much progress had been made to strengthen the banking sector, Directors observed that a sizeable agenda remains. They welcomed the transfer of banks’ distressed property development and commercial real estate assets to the NAMA and the complementary decision to raise banks’ capital targets. Going forward, the orderly disposal of NAMA’s assets will help restore the commercial property market. While mindful of the moral hazard risks, Directors noted that narrowly-targeted support measures for vulnerable homeowners would limit the economic and social fallout of the crisis. Directors also welcomed the authorities’ intent to proactively reshape the banking system, noting the importance of using a strategic, but market-oriented, approach.

    Directors emphasized the need to strengthen the financial stability framework. They welcomed recent institutional changes to enhance regulation and the proposed new risk-based supervisory approach. They also encouraged an early action to introduce a special bank resolution mechanism, which would further strengthen the stability framework and add to the set of tools available to meet contingencies.

    Acknowledging the authorities’ significant fiscal efforts to date, Directors underscored the importance of adhering to the further consolidation targets going forward. They noted that the authorities’ ambitious targets remained appropriate, but their achievement would require continued resolve. Directors agreed that the consolidation plan would benefit from greater specificity. Many Directors also encouraged the authorities to stand ready to adopt additional measures to reach the fiscal goals and retain hard-earned credibility in the event of unfavorable developments.

    Directors encouraged the authorities to move further towards a medium-term budget framework. This could help provide the structure to reduce the uncertainties associated with the consolidation process. Directors also recommended that the authorities consider adopting a fiscal rule and establish a fiscal council to advise on risks underlying public finances. Such mechanisms could help enhance policy credibility now and in the future."


    http://www.imf.org/external/np/sec/pn/2010/pn1086.htm


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