HL Deb 20 November 1963 vol 253 cc437-40WA
LORD GRANTCHESTER

asked Her Majesty's Government:

The terms of reference of the Committee appointed under the Chairmanship of Mr. Roosa at the September meeting of the International Monetary Fund.

THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT BLAKENHAM)

During the recent annual meeting of the International Monetary Fund in Washington representatives of the ten countries which are members of the Fund's borrowing scheme (Cmnd. 1656) met and on October 2 issued a statement the text of which I will, with permission, circulate in the OFFICIAL REPORT.

Paragraphs 4–6 of this statement indicate the nature and purpose of the examination of the international monetary system which the ten countries set in train and in effect constitute the terms of reference for the work to be done. Mr. Robert Roosa, Under Secretary at the United States Treasury, is in the chair of the meetings of the deputies of the ten Ministers to whom the work has been delegated. The deputies will report to Ministers in due course.

Following is the text of the statement:

Text of communique issued by the Group of Ten in Washington on Wednesday, 2nd October, 1963.

1. In the course of the annual meeting of the International Monetary Fund, the Ministers and Central Bank Governors of the 10 countries (Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom and the United States) participating in the agreement of December 1961 to supplement the resources of the International Monetary Fund met in Washington, together with Mr. Pierre-Paul Schweitzer, Managing Director of the Fund. In this meeting, they discussed the international payments situation and reviewed the functioning of the international monetary system now and in the future in the light of their common aims as reflected in the Fund's Charter.

2. They agreed that the removal of the imbalances still existing in the external accounts of some major countries was the most important objective to be pursued over the near future. For this reason they welcomed the recent efforts of certain deficit countries to improve their balances of payments, as well as actions by a number of countries designed to reduce or remove surpluses, as evidence of progress towards a better basic international equilibrium. The Ministers and Governors reaffirmed the objective of reaching such balance at high levels of economic activity with a sustainable rate of economic growth and in a climate of price stability.

3. In examining the functioning of the international monetary system, the Ministers and Governors noted that the present national reserves of member countries, supplemented as they are by the resources of the I.M.F. as well as by a network of bilateral facilities, seemed fully adequate in present circumstances to cope with possible threats to the stability of the international payments system. In this connexion, the Ministers reviewed the "General Arrangements to Borrow" in the International Monetary Fund and reiterated their determination that these resources would be available for decisive and prompt action.

4. In reviewing the longer-run prospects, the Ministers and Governors agreed that the underlying structure of the present monetary system—based on fixed exchange rates and the established price of gold—has proven its value as the foundation for present or future arrangements. It appeared to them, however, to be useful to undertake a thorough examination of the outlook for the functioning of the international monetary system and of its probable future needs for liquidity. This examination should be made with particular emphasis on the possible magnitude and nature of the future needs for reserves and for supplementary credit facilities which may arise within the framework of national economic policies effectively aiming at the objectives mentioned in paragraph 2. The studies should also appraise and evaluate various possibilities for covering such needs.

5. The Ministers and Governors have noted with approval the statement by the Managing Director that the International Monetary Fund will develop and intensify its studies of these long-run questions. They, for their part, have now instructed their Deputies to examine these questions, and to report to them on the progress of their studies and discussions over the course of the coming year. They requested the Deputies in carrying out these studies to maintain close working relations with the International Monetary Fund and with other international bodies concerned with monetary matters. Any specific suggestions resulting from the studies by the Deputies will be submitted to the Ministers and Governors for consideration.

6. The Ministers and Governors believe that such an examination of the international monetary system will further strengthen international financial co-operation, which is the essential basis for the continued successful functioning of the system.

House adjourned at twelve minutes before eight o'clock.