Future Role of IMF Is Debated as Financial Crisis Takes Toll
| Author | Camilla Andersen |
| Position | IMF External Relations Department |
| Pages | 176-177 |
Page 176
Amid hectic meetings of world leaders trying to stem the collapse of the financial system, leading economists and politicians debated the IMF's future role and governance in a reformed financial order.
British Prime Minister Gordon Brown said on October 15 that the IMF should be reshaped to help regulate the world's financial system and avoid a repeat of the global credit crisis, a proposal similar to that of the Egyptian Finance Minister Youssef Boutros-Ghali, the new head of the IMF's policy guidance committee, the International Monetary and Financial Committee.
"The IMF should, in the near future, step in to put some coherence in financial regulations and in the surveillance of financial markets-cross-border surveillance, cross-border coherence between regulatory practices, accounting practices, and so on," Boutros-Ghali told the IMF Survey in an interview. "Many of these things have been suggested by a number of study groups and experts, and I think the IMF is eminently capable of being the institution that implements these recommendations."
How the IMF should be reformed to take on a new role following the financial crisis was debated by a high-level panel organized by the Per Jacobsson Foundation during the IMF-World Bank Annual Meetings on October 12.
Acting as moderator, Andrew Crockett, Chairman of the Per Jacobsson Foundation and President of JPMorgan Chase International, said that the IMF, in the course of its 64-year history, had shown itself to be quite adaptable as the world economy changed. But this time, he said, "the transformation of the IMF's role in the international financial system will need to be more wide-ranging than in the past."
He asked the panel to consider four questions:
* How can the IMF be more effective in helping prevent, and deal with, global financial instability?
* How can the IMF be more effective in ensuring that exchange rates play their appropriate role in facilitating adjustment?
* How can the IMF adapt its lending facilities in the light of changing realities?
* If governments were starting afresh in 2008, how would the international monetary institution they might design differ from the IMF?
Trevor Manuel, South Africa's Finance Minister, said the IMF had, until now, seemed remote from the crisis, a bad sign for the relevance of the institution. "The big challenge, then, is to...
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