Question

Following the publicity given last week to the Concluding Statement of the IMF’s recent Article IV Consultation Mission to the UK, I decided to check it out for myself. There is a full list of recent Concluding Statements here. As you can see, Ireland is conspicuous by its absence from a very comprehensive list of countries. This is not because Article IV consultations are not done here, since they are.

So, what explains our absence from the list? Have Concluding Statements never been published for Ireland, and if so, why is that? Or, were they published at one time, and was publication subsequently halted — and if so, why?

4 thoughts on “Question”

  1. I don’t see any Concluding statements, but there are reports on Article IV Consultations published on the web. The 2007 one is at http://www.imf.org/external/pubs/ft/scr/2007/cr07325.pdf.

    While the report does highlight many of the issues that have since reared up and bitten us, I particularly like this heading: “Economic performance remains very strong, supported by sound policies.”

  2. See them all on
    http://www.imf.org/external/country/irl/index.htm

    Yes Ireland’s last Article IV Consultation dates from Sep 2007, with this very unusual warning (for a consultation)…
    “Directors welcomed the indicators confirming the soundness of the Irish
    banking system, including the stress tests suggesting that cushions are
    adequate to cover a range of shocks even in the face of large exposures to the property market. Nevertheless, financial sector vulnerabilities, including those arising from high household indebtedness and rising interest rates, require continued supervisory vigilance. In this context, Directors commended the progress in implementing the recommendations of the 2006 Financial Sector Assessment Program update. They called for continued careful monitoring of banks’ risk management practices…”

    I have a huge respect for the IMF’s reports. Solid professional analysis … among the best out there across a broad spectrum of countries (sometimes the only independent voice). And well written, in plain English, widely accessible.
    To be able to do this, the IMF need widespread cooperation from the government, the MoF etc.
    Just sometimes the IMF’s voice is drowned by diplomatic language. The messages from the latest reports on eurozone sovereigns are however a bit less veiled than the past. So the IMF’s voice is getting heard, despite upcoming elections in Europe.
    That is promising, for clarity and transparency, if not always for the pleasure of the governments.

    In 2006, we had several publications on Ireland. Just a year before 2007. So yes the long gap now would appear surprising, especially given the controversies and systemic risk posed.

    One of those reports was the
    Financial System Stability Assessment Update. along with an Article IV etc
    Already it was quite significant that there was such a FSAP report. Not every sovereign has the honour.
    Moreover the assessors included Jörg Genner (consolidated supervision
    expert, from Germany’s BaFin)
    This was the conclusion
    “The outlook for the financial system is positive. That said, there are several macro-risks and challenges facing the authorities. As the housing market has boomed, household debt to GDP ratios have continued to
    rise, raising some concerns about credit risks. Further, a significant slowdown in economic growth, while seen as highly unlikely in the near term, would have adverse consequences for banks’ non-performing loans.
    Stress tests confirm, however, that the major financial institutions have adequate capital buffers to cover a range of shocks.”
    I do have some sympathy with this view. I was writing similar myself in other areas. We knew leverage was overextended etc, that Basel was too problematic etc. etc. But picking the date and depth of the turnaround was hard indeed, and could matters could have turned out quite differently with better policy management in 2007/8, i stll do believe.

    That still does not quite answer Kevin’s question… Sep 2007, and waiting.
    And where are the CBI’s Financial Stability Report 2008 and Financial Stability Report 2009? Or even any working papers that deal seriously with policy issues?

  3. Am I the only cynic that thinks these IMF/CB reports will be held over till after the june elections…..?

  4. @ Kevin: Many of the documents you’re talking about are publically available in the IMF’s archives. But obviously, it is difficult for any of us to get hold of them without making the trip over there. Recently, I had the opportunity to take a look at the Irish documents when I was doing some research there. The August 2000 concluding statement was shockingly prescient! If the government had followed their advice from that Article IV mission, Ireland today would be a very different place. They correctly identified the problems we faced at the time: overheating, property bubble, imbalances in our tax system. They also proposed reasonable solutions that we clearly ignored. Unfortunately, the statement from the Irish director in response to the IMF recommendations is not yet in the public domain. I’m very much looking forward to reading it in a few years time as it sets out the governments view on the exercise, and what they plan to do to address the IMF’s recommendations.

    IMF reports are automatically published unless a government requests that they be classified. I can only speculate as to why countries might not publish policy documents but there are many possibilities. Governments who want to do this because the material is politically sensitive must show argue their case. The IMF’s Managing Director grants these only in the case of material that is ‘highly market-sensitive’ or if releasing information about a policy would prevent the member from implementing the policy.

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