Letter to the Managing Director of the IMF

Dear Managing Director,

We are confronted with a severe economic and financial crisis that is affecting jobs and livelihoods for millions of people. The world economy is facing big challenges, and Norway welcomes the G20 devoting its full attention to handling the difficult issues raised by the crisis.

However, I think it is crucial that the G20-initiative is given an institutional and multilateral foundation. It is therefore important that the recommendations and initiatives offered by the G20 process are anchored in multilateral institutions with a broad country representation, e.g. the IMF, the Multilateral Development Banks and the UN at large.

The crisis has revealed flaws in the regulation and supervision of the financial systems in several countries, and weaknesses in the risk management of financial institutions have been exposed. It is important to focus both on crisis management and on measures to prevent similar developments in the future. There are also lessons to be learnt for the formulation of macroeconomic policy.

With its broad competence, political support and established surveillance of member countries, it seems appropriate for the IMF to have a more comprehensive role in the surveillance of the financial markets.

Steps should also be taken to ensure that the IMF is capable of meeting borrowing needs of member countries that might arise in the current crisis. To that end, the Ministry of Finance and Norges Bank are exploring a possible Norwegian contribution of financial resources to the IMF. With a view to the urgency of the situation, I suggest that we start a dialogue rather quickly on the size and form of support from Norway that might be helpful.

Please find enclosed for your information a Norwegian position paper on the main issues for the upcoming G20 meeting.

Yours sincerely,

Kristin Halvorsen