FROM THE OFFICE OF PUBLIC AFFAIRS

We welcome the agreement announced by the IMF today to reform and streamline its lending instruments. This agreement is a key step toward the kind of change that we have been advocating to modernize the IMF in line with the challenges of today's global financial markets - so that it supports rather than supplants access to private capital markets.

Building on the decision earlier this year to eliminate four facilities, the IMF has agreed to:

• Shorten the effective duration of IMF core lending facilities by establishing strong expectations of early repayment that can be extended only in exceptional circumstances.
• Confine lending under the Extended Fund Facility to limited cases in support of medium-term reforms.
• Introduce premium pricing for borrowing beyond certain levels even under the IMF's normal lending instruments (both Stand-by and Extended Arrangements) - broadening an incentive mechanism begun under the Supplemental Reserve Facility and Contingent Credit Line.
• Enhance monitoring of country policies after programs are concluded but while IMF resources are still outstanding.
• Strengthen the Contingent Credit Line as a mechanism for encouraging strong policies before crises hit.

With today's announcement and other steps taken this year, we have seen dramatic progress to equip the IMF to function in the modern world economy and global capital markets. We look forward to reviewing this progress and discussing next steps in strengthening the international financial system at the Annual Meetings in Prague.