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.
“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.