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A stronger mandate for IMF surveillance needed to tackle debt crises – BOE’s Shafik

FXStreet (Mumbai) - Speaking at the David Hume Institute in Edinburgh on late Tuesday, Bank of England (BOE) Deputy Governor Minouche Shafik said there should be a more comprehensive and reliable global safety net system to deal with sovereign debt crises across the world. Shafik made no mention of the BOE monetary policy stance.

Key Quotes:

"A better global financial safety net with the [International Monetary Fund] IMF at its heart and three key additional elements that will make the safety net more effective."

First there should be "a more reliable and flexible source of funding for the IMF and greater clarity on coordination with Regional Financial Arrangements".

"Second, a stronger mandate for IMF surveillance and stress testing to reduce the likelihood that countries might need recourse to the safety net, and possible prequalification to reduce stigma when liquidity is needed."

Shafik also stressing the need for "better mechanisms for dealing with debt restructuring and reducing the risk of disorderly spillovers."

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