This paper presents a comparative case study of IMF relations with Hungary and Slovenia during the period of rapid credit growth in the early and mid-2000s, and after the global financial crisis in 2008. Before 2008, the IMF focused on promoting global codes of conduct in financial supervision such as the one developed by the Basel committee. The Fund sought to reduce informational asymmetries for market participants and consumers in order to improve risk management. When the 2008 global financial crisis showed that this strategy was not sufficient to guarantee financial stability, the IMF also started to recommend more far-reaching institutional reforms such as ensuring greater operational independence of the financial sector regulator from the government in Hungary. My analysis highlights the primacy of domestic political concerns over international policy advice. I find that in both Hungary and Slovenia, IMF advice has been taken into consideration when it coincides with domestic political priorities. However, when IMF advice runs contradictory to a government’s priorities, the latter prevail. As the Hungarian case demonstrates, this is in sharp contrast to the dynamics of IMF relations with Central and Eastern European states before they joined the European Union.
