Key elements of good governance and transparency should include, at a minimum, international generally accepted accounting principles, budget transparency, independent audit function, anti-corruption mechanisms and public participation. The IFIs are well positioned to lead on these crucial issues, and we look to them to exercise that leadership forcefully. Hence, a key challenge for the Bank and Fund is to improve their coordination and effectiveness on financial sector issues to avoid the problems that have arisen, and to manage overlaps in their respective roles. At present, the main concrete proposal put forth by both organizations is the creation of the Financial Sector Liaison Committee, which we support. However, the creation of a Committee is not enough.
Substantial change including cultural - is required of both institutions.
It is past time to put aside institutional rivalries unbefitting public institutions with the same shareholders. We look to the Management of both institutions to deliver this change and to do so quickly. Both the Bank and the Fund need to provide their respective Boards with papers detailing the changes in staffing, budgets, reporting structure, and operational procedures that they are proposing to adopt to enhance collaboration on financial sector issues and in response to financial sector crises. We also believe that information should be fully shared between the Bank and the Fund and would like both institutions to take the steps necessary to make this a reality. The Bank must develop a more effective internal decision-making structure that allows it to quickly coordinate its responses with those of the Fund.