Monday, March 18, 2013

Contradicing press releases

Dear IMF,

in the press release 13/79  is stated that:

"Further progress towards a full embrace of a Union-wide approach to financial stability— crisis management, deposit insurance, supervision and resolution, with a common backstop for the banking system, especially for the monetary union is needed to strengthen the ability of the system to avert and withstand shocks."
In the press release 13/80  Christine Lagarde welcomes an agreement which has shown that there is no trustworthy deposit insurance in Cyprus and many think it reduced confidence in deposit insurance in other countries.
So I have four question I would really like answered:
1) Was the IMF aware that the IMF believes deposit insurance "is needed to strengthen the ability of the system to avert and withstand shocks"?
2) If so, why did the IMF welcome an agreement which clearly contradicts the advice of the IMF?
3) Since, the IMF is one of the parties, which showed that it lacks necessary crisis management skills concerning the Cyprus banking situation and caused a deepening of the crisis there, will the IMF advice against participation of IMF officials in future talks to avert shocks?
4) If so, does the IMF believe IMF officials care at all about IMF advice?

Yours Sicerely.

P.S.: I am sorry that these questions seem rather strange. But one must admit, that an institution which needs less than 24 hours to contradict itself is a pretty unique beast so it deserves special questions.

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