CORNEL BAN, GABRIELA GABOR Recalibrating Conventional Wisdom: Romania-IMF relations under scrutiny Executive summary g This study proposes a critical evaluation of Roma­nia-IMF relations by focusing on financial, monetary and fiscal policy choices. As such, the study has two pillars. First, Daniela Gabor scrutinizes the IMF’s take on the Romanian central bank’s monetary and fi­nancial stability policies. Gabor finds that the central bank and the IMF have constructed and reproduced the fiction that the central bank controls monetary (and to some extent financial) conditions in the econ­omy through its inflation-targeting regime. This fic­tion is useful for the central bank to deny responsibil­ity for domestic economic developments, and for the IMF to construct balance of payment crises as crises of state intervention in the economy. Moreover, the central bank uses liquidity management instruments (standing facilities, open market operations) for the purpose of managing capital flows, and not for in­flation targeting, as the IMF demands. Finally, both the central bank and the Fund share the belief that a gradual, orderly transition to a local banking model is to be achieved by market means rather than via reg­ulatory interventions. This market-driven approach enables transnational banks to forge alliances with the central bank in order to oppose government-ini­tiated measures by narrating them as measures that pose serious risks to financial stability. g Next, Cornel Ban’s analysis of Romania’s relations with the Fund makes two claims. First, it shows that the fiscal consolidation measures adopted by Roma­nia in 2010 has had deleterious consequences for the country’s growth and social inclusion objectives. Second, by looking at the Fund’s own official fiscal policy doctrine and at the research conducted by Fund staff, Ban suggests that Romanian policymakers could have found support in the Fund’s own research and official doctrine for a fairer and less growth-un­friendly fiscal consolidation.