Switzerland backs IMF powers to monitor financial sectors
The finance minister, Kaspar Villiger, says Switzerland would like to see the International Monetary Fund (IMF) granted greater powers to monitor national financial sectors.
Villiger said the IMF proposal would enable the organisation to identify possible sources of instability.
Both Villiger and the economics minister, Pascal Couchepin, are in Prague for the annual meeting of the IMF and World Bank.
Villiger was speaking in Prague on Sunday after chairing a meeting of finance ministers of the G10 countries (G7 most industrialised countries plus Switzerland, the Netherlands, Belgium and Sweden).
He also said the G10 countries had agreed to back IMF efforts to increase the participation of the private sector in preventing financial crises.
Villiger said Switzerland backed the IMF’s Financial Sector Assessment Program (FSAP), which would help assess how far member countries were complying with accepted regulations and procedures.
“We believe it is not only emerging countries or those in transition that should undergo such detailed investigations,” he said.
Villiger said the financial markets in developed countries could also be sources of risks. He said Switzerland was prepared to join the FSAP.
The IMF’s governing body, the International Monetary and Financial Committee (IMFC), also met on Sunday. Discussions were dominated by the IMF/World Bank Highly Indebted Poor Countries initiative, which aims to reduce the debt burden of countries that spend more on interest repayments than on health or education.
A statement issued after the meeting said the IMF and World Bank would “do everything possible” to enable 20 countries – instead of 10 – to benefit from the programme by the end of this year.
Switzerland warned last week it would oppose the measure if it meant watering-down the strict criteria for qualifying.
Giorgio Dhima, head of the IMF section in the finance ministry, reiterated in Prague on Sunday that there was no point clearing the debt of countries not committed to reforms, “otherwise we will have another mountain of debt in three years’ time and we won’t have taken a single step forward.”
The weekend meetings of the G7 and IMFC come ahead of the annual meetings of the IMF and World Bank, which begin on Tuesday.
swissinfo with agencies
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