EFSD participates in third RFA High-Level Dialogue
Moscow, 16 October 2018. On 10 October 2018, Regional Financing Arrangements (RFAs) held their third High-Level Dialogue in Bali, Indonesia, to discuss the progress achieved in their respective areas of activity, as well as the format of cooperation with the International Monetary Fund (IMF) and between the RFAs. Such meetings serve as an important platform for developing and strengthening the Global Financial Safety Net.
The meeting participants included representatives of the Eurasian Fund for Stabilization and Development, the European Stability Mechanism (ESM), the ASEAN+3 Macroeconomic Research Office (AMRO), the Latin American Reserve Fund (FLAR), the Arab Monetary Fund (AMF), the BRICS Contingent Reserve Arrangement, the European Commission, the G20 International Financial Architecture Working Group, and the IMF.
In his keynote speech, Mr. Tharman Shanmugaratnam, Deputy Prime Minister of Singapore and Chairperson of the G20 Eminent Persons Group, presented recommendations on improving the Global Financial Safety Net and called for closer coordination between the IMF and RFAs when large-scale financing is needed to support countries during global liquidity shocks. It would also help minimise contagion and contribute to economic growth and transparency of the Global Financial Safety Net.
The RFAs reported on institutional developments and the risks that their regions have faced since the second High-Level Dialogue in October 2017. Among such achievements, they mentioned new financial assistance programmes, post-programme monitoring, and test runs, while the risks included the manifestation of external shocks and excessive fiscal and external consolidation, which could delay the economic recovery.
“EFSD is a unique RFA for its versatile mission. It includes macroeconomic balances support as well as infrastructure and social sector development. That demands specific set of instruments, which drastically distinct from other RFAs`and includes financial loans and investment and grant financing”, - said Mr. Tigran Kostanyan, acting director of EFSD project group.
The participants supported a staff paper on IMF-RFA collaboration jointly prepared by the staff of ESM, AMRO, FLAR, EFSD, AMF and European Commission, which identified the key areas that could benefit from enhanced collaboration, such as joint training programmes and information sharing. The participants also reaffirmed their commitment to further enhancing this Dialogue and maintaining it as the leading platform to discuss the issues of strengthening the Global Financial Safety Net.
The Eurasian Fund for Stabilization and Development (EFSD) was formed on 9 June 2009 by the governments of the same six countries. Its charter capital is US $8.513 billion. The EFSD assists its member countries in overcoming the consequences of the global financial crisis, ensuring their economic and financial stability, and fostering integration in the region. The EFSD member countries signed the Fund Management Agreement with the EDB, giving it the function of the EFSD Resources Manager.
Regional Financing Arrangements (RFAs) are multilateral agreements between countries with a view to providing joint financial assistance to each other in support of their budget and/or balance of payments.
The Global Financial Safety Net is a system for crisis prevention, which consists of four layers, including national reserves and fiscal space, swap arrangements between countries, Regional Financing Arrangements, and the International Monetary Fund.
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