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International Monetary Fund. Strategy, Policy, & Review Department

predictive densities directly, they can still inform the assessment of tail risks (notwithstanding communication challenges in presenting high-impact low-probability risks discussed above). 19. Strategic foresight tools are an important addition to the Fund risk preparedness framework and there is room to use them more in surveillance. Strategic foresight uses a range of methods to scan the future for ‘unknown unknowns’. Techniques used at the Fund include megatrends analysis, variations of scenario planning exercises, and policy gaming (see Annex II for more details

International Monetary Fund. Strategy, Policy, & Review Department
The coverage of risks has become more systematic since the Global Financial Crisis (GFC): staff reports now regularly identify major risks and provide an assessment of their likelihood and economic impact, summarized in Risk Assessment Matrices (RAM). But still limited attention is paid to the range of possible outcomes. Also, risk identification is useful only so much as to inform policy design to preemptively respond to relevant risks and/or better prepare for them. In this regard, policy recommendations in surveillance could be richer in considering various risk management approaches. To this end, progress is needed on two dimensions: • Increasing emphasis on the range of potential outcomes to improve policy design. • Encouraging more proactive policy advice on how to manage risks. Efforts should continue to leverage internal and external resources to support risk analysis and advice in surveillance.