Regional financial mechanisms (RFMS) are multilateral agreements between countries to provide joint financial assistance to each other in the form of budget and/or balance of payments support.

In addition to the EFSD, other major RFMS are: the Arab Monetary Fund (AWF), the European Stabilization Mechanism (ESM), the Latin American Reserve Fund (LRF), Balance of Payments Support from the European Union (EU BOP), the BRICS Foreign Exchange Reserve Pool (BRICS PVR), the North American Framework Agreement (NAFA), the Chiang Mai Multilateral Initiative (MICM), South Asian Association for Regional Cooperation (SAARC).

RFMS are usually created within the framework of economic unions, which, by their very nature, are most susceptible to the "chain reaction effect" (especially in the case of a monetary union). Due to the RFM, economic imbalances in one country can lead to budgetary obligations in other countries of the mechanism.

RFMS are part of the global financial protection system and help prevent and mitigate the effects of economic and financial crises. The global financial protection system includes four levels:

I. National: foreign exchange reserves and fiscal space of the country

II. Two-way: swap lines between countries

III. Regional: RFM

IV. Global: International Monetary Fund (IMF)

The effectiveness of the global financial protection system depends on the adequacy of its financing and the degree of coordination both between and within all its levels.

The RFM volumes are shown in the following table:

Source: Collaboration between regional financing arrangements and the IMF, IMF Policy Paper, July 2017 FFMS vary greatly in their scope, mandates and structure. Conditionally, we can single out "budget funds", whose work is directed by the ministries of finance of the participating countries (AVF, ESM, EFSD) and multilateral currency swaps between the central banks of the participating countries (MICM, LRF, SAARC, NAFA).

Properly structured interaction between the RFM and the IMF, as well as between the RFMS themselves, will lead to a reasonable allocation of resources and ensure proper oversight, as well as the institutional development of the participants involved. Uncoordinated assistance to countries can provoke serious risks of abuse, such as, for example, choosing the most "convenient" approaches or programs instead of necessary but unpopular measures.

In 2017, the goal of achieving more effective cooperation between the IMF and the Russian Federation was included in the Hamburg G20 Action Plan.

Since 2016, high-level annual meetings have been held between representatives of the RFM and the IMF on cooperation issues.:

First high-level meeting between RFM and IMF representatives (October, 2016)

Second high-level meeting between representatives of the Russian Federation and the IMF (October, 2017)

Third high-level meeting between representatives of the RFM and the IMF (October, 2018)

Since 2017, annual RFM research seminars have been organized:

The first joint RFM Research Workshop in Singapore (September, 2017)

The second joint RFM Research Workshop in Colombia (May, 2018)

Publications:

Joint report on cooperation between the RFM and the IMF

Other studies:

Regional financial mechanisms in the Global Financial Protection System: the Arab Monetary Fund and the Eurasian Fund for Stabilization and Development

IMF–RFM cooperation: motives, state of affairs and future prospects. A joint proposal by the RFM staff