Friday, October 2, 2009

My Notes on IMF Managing Director Dominique Strauss-Kahn Press Briefing

Again, mostly for my archiving purposes, but the real thing is on the IMF site. Feel free to email me with questions. As for my impressions of him, I had never understood why he is often termed ebullient or jovial. But he is indeed quite a likable chap. Anyway, I believe that he was the right person at the right time for the Fund. I mean, I doubt that the IMF would have benefited as much from the crisis under a different leadership. I am planning to elaborate on this issue in my last Daily column on Wednesday or Thursday, before I again resort to the Daily schedule....

DSK remarks: is worried about unemployment a lot. 1.We have to make sure exit strategy is too early. He is happy fin. Min. Arer aware of this. 2. We have to make sure financial sector fixed. 3. We have had econ. cooperation in the last few months. In Pittsburgh, we got very firm will form economic cooperation.

3 principles which I will elaborate later in the day:
1. We need sustained econ. Cooperation., same with all IMF members as in Pittsburg.
2. We absolutely ned to improve financial stability- means better supervision and regulation.
3. IMF itself: we need stable financial mon. System for IMF to be lender of lasr resort. Imbalances come from reserves- very costly- which was at the founders of IMF (ED: this is related to FCL). How can we provide credibility and legitimacy to IMF for being lender of last resort? This was in the minds of the institution.
This is necessary for peace and democracy!!!
This won't be solved in a couple of days, but this meeting will be the starting point of new IMF- you can tell your grandchildren one day.

Q: what about Tobin tax?
A: very old idea. I don't think it will work for technical reasons- difficult to implement.But we will prepare a report on some modified version. Lipsky: we need to look more broadly than deposit insurance.

Q: IMF has been unable to discipline largest member.
A: 65 years you are right, 65 days no. It was possible because we were right. If what we say is true, we can the convince. That's what happened with stimulus.

Q: you said IMF will be machinery for Implementing G-20. How will you deal with FX?
A: 2 points. 1.cooperation is also about imbalances. I was impressed by collective problem solving. We need to solve q together.2. G-2O understands that connections between countries is complicated.

Q: Serbia
A: we no longer advocate same program everywhere. We need to adapt programs. But fiscal deficits is a common factor in all countries.

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