Islamic Banking Proposals Get IMF Approval

By Ghiath Shabsigh, Ross Leckow, and Zeine Zeidane

Versions in:  ArabicFrenchIndonesian, and Malay

Islamic banking, a small but fast-growing corner of the financial world, is receiving greater attention from regulators and policy makers. The IMF recently adopted a set of proposals on Islamic banking and called for a more comprehensive set of policies to ensure financial stability in countries with Islamic banking and support the sound development of the industry. The IMF is now calling for additional work and cooperation by its staff with other international agencies to improve the adoption of relevant standards for Islamic banking and to address remaining regulatory gaps.  (more…)

Accelerating Financial Sector Development to Boost Growth in Sub-Saharan Africa

Anne-Marie Gulde-Wolf.IMFBy Anne-Marie Gulde-Wolf

Version in Français (French), Português (Portuguese)

There are many reasons why deeper financial development—the increase in deposits and loans but also their accessibility and improved financial sector efficiency—is good for sustainable growth in sub-Saharan Africa. For one, it helps mobilize savings and to direct funds into productive uses, for example by providing the start-up capital for the next innovative enterprise. This in turn facilitates a more efficient allocation of resources and increases overall productivity.

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Managing China’s Economic Transition

Changyong RheeBy Changyong Rhee

(Version in 中文 and Español)

From advanced economy financial markets to developing country commodity producers, the world has closely followed developments in China in recent months. After 35 years of extraordinarily rapid growth, the Chinese economy is undergoing a major transition from export-led growth to a model increasingly driven by consumption and services, with less emphasis on debt-financed public investment.

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Strengthening the Foundations for Fiscal Policymaking: A New Fiscal Transparency Code

Min ZhuBy Min Zhu

In the last two decades, countries have come a long way in shedding greater light on their public finances. The global economic crisis has reminded us, however, that we need to do more to ensure fiscal policymaking is based on reliable data on fiscal outcomes, credible forecasts of fiscal prospects, and a comprehensive assessment of fiscal risks. Working with civil society, governments, and others, the IMF has just presented a revised draft of its Fiscal Transparency Code, and we would like to know what you think of it so we can improve it further. You can comment here.

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Rethinking Macroeconomic Policy

blanchBy Olivier Blanchard

(Versions in عربي中文FrançaisРусский, and Español)

The IMF has just hosted a second conference devoted to rethinking macroeconomic policy in the wake of the crisis. After two days of fascinating presentations and discussions, I am certain of one thing:  this is unlikely to be our last conference on the subject.

Rethinking and reforms are both taking place.  But we still do not know the final destination, be it for the redefinition of monetary policy, or the contours of financial regulation, or the role of macroprudential tools. We have a general sense of direction, but we are largely navigating by sight.

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The MENA Jobs and Growth Challenge: How Can Finance Help?

Most policymakers in the Middle East and North Africa agree that stronger economic growth is a crucial component of any strategy to address the region’s persistently high levels of unemployment and raise its living standards. One question that arises is: What role can the financial sector play? It is well known that a dynamic and vibrant financial sector will improve economic outcomes for a country, leading to faster and more equitable economic growth. The key to answering this question, therefore, is to look to the past and examine how the financial sector has contributed historically to growth in the region. Unfortunately, the experience in the Middle East and North Africa has not been as successful as in other regions. How, then, can policymakers in the region enhance the financial system’s contribution to growth?

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