Switzerland has an important say in the International Monetary Fund (IMF). As a constituency leader, it is permanently represented in the IMF Ministerial Committee and Executive Board, where it plays an active role. Switzerland is a reliable partner in initiatives to maintain the stability of the international financial and monetary system. Its almost universal membership with 190 countries gives the IMF a high degree of legitimacy as a multilateral player.
Switzerland has been a member of the IMF since 1992. The Head of the FDF represents Switzerland in the International Monetary and Financial Committee (IMFC). The IMFC convenes every six months, and these meetings are followed by meetings of the G20 finance ministers and central bank governors. As the leader of a constituency consisting of Azerbaijan, Kazakhstan, the Kyrgyz Republic, Poland, Serbia, Switzerland, Tajikistan, Turkmenistan and Uzbekistan, Switzerland has a permanent seat on the IMF Executive Board. Its Executive Board seat has rotated with Poland since 2014. The constituency has a voting share of 2.89%, whereby Switzerland has a share of 1.21%.
> Overview of Switzerland's relations with the IMF
As an open and dynamic economy with a significant financial sector and its own currency, Switzerland has a major interest in helping to shape global financial and monetary cooperation. It is important to Switzerland that the IMF exercises its mandate to ensure the stability of the international financial system in a credible and effective manner and, as a major multilateral player, treats its members equally. Consequently, based on the principles of Switzerland's policy in the IMF, approved by the Federal Council, the country is committed to ensuring that the IMF conducts its activities in a rule-oriented and transparent manner and remains financially sound. At the same time, Switzerland promotes sustainability in the monetary, budgetary, debt and financial sector policies of the IMF's member countries.
> Principles of Switzerland's policy in the IMF
The IMF's activities cover the following dimensions. It performs these tasks in ongoing dialogue with its members:
The IMF's activities focus on the early detection and prevention of economic imbalances that could lead to a monetary, financial or debt crisis. Its surveillance activity relates primarily to the macroeconomic policies of its members. It also includes important overarching trends in the system as a whole, including the impact of the digital transformation and climate change. The IMF's regular Article IV consultations (country evaluations) are an obligation of membership. The financial sectors of the most important countries for the system are evaluated in depth (Financial Sector Assessment Program, FSAP). The semi-annual reports on the state of the world economy (World Economic Outlook, WEO), the financial system (Global Financial Stability Report, GFSR) and government finances (Fiscal Monitor) provide an overall view. The willingness to cooperate and the provision of a sufficient statistical basis, which makes surveillance possible in the first place, are also part of the membership obligations. The IMF is a global standard setter in the area of data (e.g. SDDS Plus).
> IMF reports on Switzerland and statistics (SDDS Plus)
IMF member countries have access to loans to resolve acute or even medium-term balance of payments difficulties. Such loans are usually linked to reform programmes, with which monetary, budgetary and financial market stabilisation or adjustment measures are agreed (conditionality). The IMF has a range of lending facilities tailored to the very different needs of its members.
> IMF lending (website IMF)
The IMF's ordinary resources are the primary source for its lending activity. Members provide these directly to the IMF by means of their quotas. They amount to a total of around USD 676 billion (476 billion special drawing rights / SDRs). In addition, 40 members have undertaken under the New Arrangements to Borrow (NAB) to provide additional funds of around USD 513 billion (SDR 361 bn) in the event of the international monetary and financial system being endangered. As a further line of defence, the IMF has additionally entered into fixed-term bilateral borrowing agreements totalling around USD 196 billion (SDR 138 bn). Members have in the past also been allocated foreign exchange reserves in the form of special drawing rights totalling USD 290 billion (SDR 204 bn). An increase to a total of USD 940 billion (SDR 660 bn) has been approved in August 2021.
> The special drawing right (website IMF)
> Switzerland's international monetary cooperation
A special Poverty Reduction and Growth Trust (PRGT) exists for poorer countries. Low-interest loans can be granted from this to 69 countries at present. PRGT loans have been subject to zero interest since the global financial crisis. The IMF additionally grants emergency loans to deal with natural disasters or public health emergencies, as was the case with the COVID-19 pandemic.
> Switzerland's international monetary cooperation
The IMF likewise offers its members technical assistance for formulating and implementing effective and sustainable economic and financial market policies. This support is provided primarily through advisory services in cooperation with local authorities and in regional training and technical assistance centres. Switzerland is one of the main donor countries for these separately financed IMF activities.
> Technical assistance of the IMF (website IMF)
The Federal Department of Finance (FDF) and the Swiss National Bank (SNB) jointly attend to Switzerland's membership of the IMF. Moreover, there is close cooperation with the State Secretariat for Economic Affairs (SECO) and the Swiss Agency for Development and Cooperation (SDC) regarding development policy issues. The FDF regularly reports to Parliament on Switzerland's financial commitment to the IMF, as well as on the monetary assistance provided by Switzerland. For the IMF itself, the Independent Evaluation Office (IEO) is tasked with critically reviewing the IMF's activities.
> Independent Evaluation Office of the IMF (IEO)
The IMF explains its activities and current focus areas in detail on its website.
Last modification 13.10.2021