The aftermath of the Asian crises prompted a wide-ranging work programme designed to strengthen the IMF's role in the areas of crisis prevention and resolution. In a number of areas, substantial progress has been made, while in others it remains work in progress.
In the area of prevention, much has been accomplished in reducing vulnerabilities. There has been a move away from pegged exchange rates that tended to be associated with the build-up of large unhedged exposures; reserve levels have been increased; financial systems have been strengthened; and there has been a substantial increase in transparency. Beyond the normal areas of policy advice, the IMF has increased the attention given to the assessment and management of risks. To this end, Article IV missions now attach considerable importance to the analysis of debt sustainability and vulnerability indicators. At the same time, complementary efforts are underway to strengthen financial system surveillance under the umbrella of the Financial Sector Assessment Programmes (FSAPs). Another strand of this work consists of promoting the adoption of, and adherence to, standards and codes, and the associated assessments of progress in these areas in the context of Reports on the Observance of Standards and Codes (ROSCs).
The CCL was intended to provide contingent financing for countries that have sound fundamentals, but which are hit by an adverse shock. Substantial efforts have been made to consider ways to modify the facility and its eligibility requirements to balance the desire to provide contingent financing, while providing adequate safeguards. To date the facility has not been utilised and in a Board discussion in early 2003 it was not considered likely that it would be used in its current form. Against this background, the IMF Board has considered options for modifying the facility. However, many IMF Directors consider that reform has been tried once before, and that it