IMF acquires new policing powers

The International Monetary Fund (IMF) has won new powers to police the world economy after its 184 member countries endorsed a new framework to monitor how the economic policies of one country affects others.

    The IMF is streamlining its monitoring abilities

    The member countries, represented by finance ministers or central bank governors, also agreed that some emerging economies needed more say in IMF decision-making that could lead to a proposal for ad hoc increases in their voting shares by the next IMF gathering in September.

    Gordon Brown, Britain's finance minister, who also chairs the IMF's policy-setting committee, told a news conference: "We resolve to make the IMF more fit for purpose in a global economy and more able to address challenges that are quite different from those of 1945, when the IMF was created."

    "The IMF should be more able to address global questions with multilateral surveillance," Brown said.

    The International Monetary and Financial Committee, or IMFC, said IMF surveillance would focus on spillovers and links between countries' economic policies and reaffirm their monetary, fiscal and exchange-rates frameworks.



    Effective authority

    "We resolve to make the IMF more fit for purpose in a global economy and more able to address challenges that are quite different from those of 1945, when the IMF was created"

    Gordon Brown, British finance minister 

    Rodrigo Rato, the IMF Managing Director, will have the authority to bring nations together on an ad hoc basis to thrash out any economic mis-alignments based on IMF analyses.

    Officials said this would create a new forum that would better reflect the rise of Asia in the global economy for instance, and could possibly replace bodies like the Group of Seven industrial countries, which some say can no longer call all the shots.

    One of the problems facing the G7 is that major economic players like China are not part of the club, even though it is the fourth-largest economy in the world.

    The United States has pressured the IMF to broaden its surveillance to include the exchange rates of emerging countries, as Washington also pushes Beijing to loosen its tightly managed currency.

    The IMF made the case that such a move was also critical to coordinating economic policies and preventing the unruly unwinding of huge global imbalances in trade and investment flows that could spark a world recession.

    SOURCE: Reuters


    YOU MIGHT ALSO LIKE

    'We scoured for days without sleeping, just clothes on our backs'

    'We scoured for days without sleeping, just clothes on our backs'

    The Philippines’ Typhoon Haiyan was the strongest storm ever to make landfall. Five years on, we revisit this story.

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    Daughters of al-Shabab

    Daughters of al-Shabab

    What draws Kenyan women to join al-Shabab and what challenges are they facing when they return to their communities?