This paper, and a companion piece on legal aspects “The Fund’s Mandate—The Legal Framework,” is the first in a series of reflections on the Fund’s mandate—on what it should be doing to promote global stability and how the membership might support that process. At this stage, the aim is not to put forward concrete proposals but to float ideas with a view to stimulating a broader debate. Follow up papers, based on feedback from the Executive Board and public outreach, are planned ahead of the final report to the IMFC in September.

Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

This paper marks the launch of a new IMF series, Fintech Notes. Building on years of IMF staff work, it will explore pressing topics in the digital economy and be issued periodically. The series will carry work by IMF staff and will seek to provide insight into the intersection of technology and the global economy. The Rise of Digital Money analyses how technology companies are stepping up competition to large banks and credit card companies. Digital forms of money are increasingly in the wallets of consumers as well as in the minds of policymakers. Cash and bank deposits are battling with so-called e-money, electronically stored monetary value denominated in, and pegged to, a currency like the euro or the dollar. This paper identifies the benefits and risks and highlights regulatory issues that are likely to emerge with a broader adoption of stablecoins. The paper also highlights the risks associated with e-money: potential creation of new monopolies; threats to weaker currencies; concerns about consumer protection and financial stability; and the risk of fostering illegal activities, among others.

This paper is intended to accompany “The Fund’s Role and Mandate—An Overview” (the “Mandate Overview Paper”). Taking into account the issues raised in the Mandate Overview Paper and, in particular, the potential areas for reform that it identifies, this paper provides a brief analysis of both the constraints and flexibility that exist under the existing legal framework. At the outset, it is useful to identify several aspects of this framework that are of particular relevance.

Over the past decade and beyond, the need for a modern anti-money-laundering strategy has become widely accepted internationally. Depriving criminal elements of the proceeds of their crimes has increasingly been seen as an important tool to combat drug trafficking and, more recently, as a critical element in fighting organized crime, corruption, and the financing of terrorism, and maintaining the integrity of financial markets. The first few financial intelligence units (FIUs) were established in the early 1990s in response to the need for countries to have a central agency to receive, analyze, and disseminate financial information to combat money laundering. Over the ensuing period, the number of FIUs has continued to increase, reaching 84 in 2003. This handbook responds to the need for information on FIUs. It provides references to the appropriate Financial ActionTask Force (FATF) standards wherever appropriate.

At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy.

How has the Bank of Japan (BOJ) helped shape Japan's economic growth during the past two decades? This book comprehensively explores the relations between financial market liberalization and BOJ policies and examines the ways in which these policies promoted economic growth in the 1980s. The authors argue that the structure of Japan's financial markets, particularly restrictions on money-market transactions and the key role of commercial banks in financing corporate investments, allowed the BOJ to influence Japan's economic success. The first two chapters provide the most in-depth English-language discussion of the BOJ's operating procedures and policymaker's views about how BOJ actions affect the Japanese business cycle. Chapter three explores the impact of the BOJ's distinctive window guidance policy on corporate investment, while chapter four looks at how monetary policy affects the term structure of interest rates in Japan. The final two chapters examine the overall effect of monetary policy on real aggregate economic activity. This volume will prove invaluable not only to economists interested in the technical operating procedures of the BOJ, but also to those interested in the Japanese economy and in the operation and outcome of monetary reform in general.

In March 2006, the Managing Director of the International Monetary Fund (IMF) and the President of the World Bank commissioned the External Review Committee on IMF-World Bank Collaboration to look at the status of institutional collaboration and provide suggestions for improvement. The Committee’s report, released in February 2007, called for the strengthening of the culture of collaboration in the two institutions, and made a number of specific proposals in that direction. The Joint Management Action Plan (JMAP) was prepared against this background, and the actions agreed between Bank and Fund managements in the JMAP are scheduled to be presented in informal Board meetings in early October. The JMAP will be launched immediately after the Annual Meetings. The goal is for most new systems to be operational in time for the preparation of FY09 budgets.

This groundbreaking new book answers an essential question: why is it that a fund client selects, or an investment consultant recommends, one asset manager over another when the two are, on paper at least, very similar? Also, why is it that some asset managers maintain their mandates during difficult periods in the cycle and others don't, even though their performances are identical? Authors Herman Brodie and Klaus Harnack investigated the drivers of these selection decisions and uncovered that so-called 'soft' factors play the primary role - even more so for consultants than for end-clients. They also discovered that these soft factors are essentially the means clients use to judge an asset manager's benevolent intentions, one of the two dimensions of the universal human evaluation more commonly known as trust. Backed by compelling data and research from multiple disciplines, The Trust Mandate breaks open the science of trust for asset managers, revealing the systematic steps clients take in their search for evidence of good intentions - the essential, but often missing, component in business relationships. It also shows how trusted managers are able to win more clients, keep them longer, merit good recommendations, allowed to take more risks, and justify higher fees. The clients of trusted managers enjoy reduced anxiety, earn higher long-run returns, and avoid costly and pointless transitions from firm to firm. So high-trust relationships are a genuine win-win situation. Yet the task of initiating and nurturing them falls squarely on the service provider. Asset managers must learn to convey their good intentions. The Trust Mandate shows why - and how - in unprecedented detail.