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IMF governance
Board of Governors
In the highest decision-making body of the IMF – the Board of Governors – Lithuania is represented by the Chair of the Board of the Bank of Lithuania. The Board of Governors normally meets twice a year to discuss major issues related to global economy and IMF policy (Spring and Annual Meetings of the International Monetary Fund and the World Bank Group).
Executive Board
The IMF Executive Board is composed of 24 Directors elected by member countries. Lithuania’s position on economic policy is represented by the Executive Director, jointly elected by eight Nordic and Baltic countries (Denmark, Estonia, Iceland, Latvia, Lithuania, Norway, Finland and Sweden). A representative from the Republic of Lithuania, appointed by the Bank of Lithuania for a 3-year term, serves as adviser to the Executive Director.
International Monetary and Financial Committee
In the Board of Governors’ advisory forum on IMF policy issues – the International Monetary and Financial Committee – Lithuania is represented by one of the Ministers of Finance or governors of the central banks of the Nordic and Baltic countries, appointed in accordance with internal rotation principles of the IMF Nordic-Baltic Constituency. The Committee meets, as a rule, twice a year and its decisions are reflected in its Communiqués.
Lithuania and the IMF
Lithuania became a member of the IMF in 1992. Detailed information on cooperation between Lithuania and the IMF is available here.
Lithuania’s role in IMF governance
- In the Board of Governors, the highest decision-making body of the IMF, Lithuania is represented by the Chair of the Board of the Bank of Lithuania. The Board of Governors normally meets twice a year to discuss major issues related to global economy and IMF policy (Spring and Annual Meetings of the International Monetary Fund and the World Bank Group).
- The IMF Executive Board is composed of 24 Directors elected by member countries. Lithuania’s position on economic policy is represented by the Executive Director, jointly elected by eight Nordic and Baltic countries (Denmark, Estonia, Iceland, Latvia, Lithuania, Norway, Finland and Sweden).
- In the Board of Governors’ advisory forum on IMF policy issues – the International Monetary and Financial Committee – Lithuania is represented by one of the Ministers of Finance or governors of the central banks of the Nordic and Baltic countries, appointed in accordance with internal rotation principles of the IMF Nordic-Baltic Constituency. The Committee meets, as a rule, twice a year and its decisions are reflected in its Communiqués.
- The Republic of Lithuania’s position on IMF policy issues is coordinated jointly by the Bank of Lithuania and the Ministry of Finance.
Lithuania and the IMF Nordic-Baltic Constituency
- In the IMF, Lithuania is part of the Nordic-Baltic Constituency, composed of eight countries (Denmark, Estonia, Iceland, Norway, Latvia, Lithuania, Finland and Sweden).
- Its total quota share accounts for 3.225 per cent, collective votes – 3.282 per cent.
- In the IMF Executive Board, the Republic of Lithuania is represented by the Executive Director, jointly elected by eight Nordic and Baltic countries. Based on the joint rotation system of the IMF Nordic-Baltic Constituency, in 2016–2019 all countries within the group will be represented by the Executive Director appointed by Sweden.
- All eight countries can each appoint an adviser to the Executive Director’s office in Washington, DC. A representative from the Republic of Lithuania is appointed by the Bank of Lithuania.
- The Nordic and Baltic Monetary and Finance Committee, the most important decision-making body of the IMF Nordic-Baltic Constituency, was established in 1999. Each country’s central bank and Ministry of Finance delegate to the Committee one member and one alternate member.
- Reports of the IMF Nordic-Baltic Constituency
- IMF Nordic-Baltic Constituency statements at the International Monetary and Financial Committee
- IMF Nordic-Baltic Constituency annual speeches at the IMF Annual Meetings
Monitoring of Lithuanian economic policies
Economic consultations under Article IV of the Articles of Agreement of the International Monetary Fund lay the foundation for IMF-Lithuania cooperation. The Article obligates the member countries to implement economic and financial policies ensuring national and global financial and economic stability. The IMF staff members visit Lithuania on an annual basis and meet with representatives from the Bank of Lithuania, the Government, private sector and non-governmental organisations, as well as politicians and experts in economy in order to discuss the domestic economic situation and development trends, and provide recommendations, which are published in Article IV Consultations Reports. Lithuania also takes part in the IMF Financial Sector Assessment Program.
Financial relations with the IMF
Bank for International Settlements
Established under the Hague Agreement in 1930, the Bank for International Settlements (BIS) is the world’s oldest international financial organisation. 60 central banks and the European Central Bank hold the membership of the BIS, headquartered in Basel, Switzerland.
The BIS pursues its mission by:
- supporting dialogue between central banks and international financial organisations in order to maintain monetary and financial stability;
- creating and developing international standards in the field of banking supervision, settlements and other major areas;
- serving as an agent or trustee in connection with international financial operations.
The Bank of Lithuania became a BIS shareholder in 1931. Its membership was restored in 1992 and 1,000 BIS shares held by the Bank of Lithuania since 1931 were returned.
The Chair of the Board of the Bank of Lithuania participates in regular meetings of the governors of the BIS-member banks, held every two months, as well as the Annual General Meetings of BIS shareholders.
Organisation for Economic Cooperation and Development
The Organisation for Economic Cooperation and Development (OECD) is an international organisation founded in 1961 when Canada and the US joined the Organisation for European Economic Cooperation. It is a forum of high-standard countries, currently uniting 35 members. The OECD’s headquarters are in Paris.
In its activities, the OECD applies the highest standards and seeks maximum transparency as well as devotes much attention to integrity of various economic areas and political transparency. Membership in this organisation serves as a proxy for the county’s economic stability and reliability, granting access to the latest research and allowing application of the best practices of the member countries in order to improve the quality of state regulation.
Lithuania’s accession to the OECD
Lithuania officially applied for OECD membership in 2002 and was invited to open membership discussions in 2015. Due to extremely strict requirements, the accession negotiations may take up to four years. Currently it is being assessed whether legal regulation of certain Lithuanian political and economic areas complies with the imposed requirements. The Bank of Lithuania works together with the OECD in assessing compliance in the fields of financial markets, insurance and private pensions, as well as participates in the OECD’s periodical and elaborate analyses of the Lithuanian economy.
Bilateral and multilateral relations
Nordic and Baltic countries, Poland
The Bank of Lithuania maintains especially close links with the central banks of the Nordic (Denmark, Iceland, Norway, Finland, Sweden) and the Baltic (Estonia, Latvia) countries. Together with these countries, Lithuania forms a single constituency in the International Monetary Fund and the World Bank.
Nordic and Baltic countries closely cooperate on issues related to financial sector supervision. With the creation of the European Systemic Risk Board, the Scandinavian countries initiated the establishment of the Nordic-Baltic Macroprudential Forum. Its main goal is to strengthen cooperation in the region, whose financial sector is especially integrated, and stimulate the decision-making process in the field of macroprudential supervision and policy. The members of the Forum discuss regional systemic risks and potential tools to manage them, share their experience, and debate on other relevant processes influencing macroprudential policy.
In cooperating, the central banks of the three Baltic countries organise, on an annual basis, management and expert meetings, and, if necessary, coordinate positions on issues related to international economics and financial policy at EU and other international forums.
With one of its major partners – the central bank of Poland – the Bank of Lithuania exchanges best practices and organises joint events on economic and financial issues.
China
Following the bilateral cooperation agreement and the ‘16+1’ initiative as well as its priorities, the Bank of Lithuania has recently strengthened its bilateral cooperation with the People’s Bank of China as well as other Chinese financial and supervision institutions. The signing of the Memorandum of Understanding between the Bank of Lithuania and the China Securities Regulatory Commission in September 2013 paved the way for Lithuanian financial institutions to directly invest in China’s capital market. The Bank of Lithuania is among the first members of the European System of Central Banks to have been granted the status of a qualified foreign institutional investor in China, as well as one of the first to invest in China. Seeking to further cultivate direct relations in the field of finance, in June 2015 the Bank of Lithuania and the China Banking Regulatory Commission also signed a Memorandum of Understanding. In 2015 and 2016, the Bank of Lithuania signed a Memorandum of Understanding and a cooperation agreement with two companies of the Chinese IZP Technologies Group (one of the largest international payments operators in Asia) on the development of the payments and settlements infrastructure.
Neighbouring countries
The Bank of Lithuania fosters bilateral relations with the central banks of Belarus, Ukraine, Moldova and other neighbouring countries. Bilateral meetings, conferences and seminars address the most relevant issues related to economy and financial policy. By demand, the Bank of Lithuania provides technical assistance to the central banks of these countries and shares its best practices in terms of relevant issues on central banking: financial sector resolution and supervision, electronic banking, cash handling, internal audit, etc. Statistical data and information as well as economic and financial publications are also shared.
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