“Good, complete data and deep financial markets are important for global financial stability,” commented Wolfgang Schmidt, State Secretary at the German Finance Ministry, on the sidelines of the IMF’s 2019 Spring Meeting in Washington, D.C. “For this reason, the German government decided last year that we wanted to support the International Monetary Fund in its efforts to develop human resources and build institutional capacity in its member countries. We are contributing €4 million to the Data for Decisions Fund. This will be used to finance workshops and seminars on how national statistics systems can be expanded. We are also providing €4 million for the Financial Sector Stability Fund. This fund is used, first, to finance evaluations that are intended to identify risks and vulnerabilities in the financial sector and, second, to fund technical assistance aimed at closing these gaps.”
On 11 April 2019, State Secretary Schmidt signed two Letters of Understanding, making the financial support legally binding. The letters set out when the individual tranches will be paid out, the size of the tranches, and the goals that the funds are supposed to reach in the coming years, among other things.
The IMF established the Data for Decisions (D4D) Fund and the Financial Sector Stability Fund (FSSF) in 2017 as two new thematic sub-funds. The goal of the D4D Fund is to improve national statistics systems in low- and lower-middle-income countries in order to collect more and better data, with the aim of promoting evidence-based macroeconomic policies. This is intended to help enhance global financial stability and facilitate the achievement of the Sustainable Development Goals (SDGs). The aim of the FSSF is to help lower-income countries build capacity in the financial sector. The development of deeper and more reliable financial markets is intended to enhance resilience against financial crises, among other goals.
The IMF’s fundamental mission is to ensure the stability of the international monetary system. In carrying out this task, the IMF’s work is based on three main roles:
a) Economic surveillance: The IMF monitors the economic and fiscal policies of its 189 member countries, tries to identify possible risks to global financial stability, and issues recommendations for action on this basis.
b) Lending: The IMF offers loans to its member countries if they find themselves experiencing actual or potential balance-of-payments problems. The IMF’s financial support is intended to help these countries rebuild their international reserves, stabilise their currencies, pay for imports, and restore the necessary conditions for strong and inclusive economic growth, while correcting underlying problems.
c) Capacity development: The IMF works with governments around the world to modernise their economic policies and institutions, and build up the necessary human resources. This helps countries strengthen their economies, improve growth prospects and create jobs.
In addition to its regional training centres, which offer a wide range of training courses, the IMF also has thematic funds, such as the D4D Fund and the FSSF, that focus on specific issues but operate across regions.