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Lagarde says IMF to discuss process on voting reforms
Republicans in the U.S. Congress have said the changes would cost too much
WASHINGTON: The head of the International Monetary Fund said on Friday the global lender was ready to discuss ways to move forward without the United States on reforms that would give emerging markets greater IMF voting power. IMF member nations agreed on so-called quota reforms in 2010, with the strong backing of the Obama administration, but the US Congress has so far failed to give the changes a needed stamp of approval. US lawmakers are preparing to leave town for the year without backing the reforms, meaning the United States will miss a deadline the Group of 20 leading nations had set for action. “I have expressed my disappointment to the U.S authorities and hope that they continue to work toward speedy ratification,” IMF Managing Director Christine Lagarde said in a statement. “As requested by our membership, we will now proceed to discuss alternative options for advancing quota and governance reforms and ensuring that the Fund has adequate resources, starting with an Executive Board meeting in January 2015,” she said.
The agreed changes would double the Fund’s resources and hand more IMF voting power to countries such as Brazil, Russia, India, China and South Africa. It would also revamp the IMF’s board to reduce the dominance of Western Europe.
Some Republicans in the U.S. Congress have said the changes would cost too much at a time Washington was running big budget deficits. The reforms also ran afoul of a growing isolationist trend among the party’s influential Tea Party wing.
It is not clear how the IMF might proceed without the United States, given that Washington is a controlling shareholder in the Fund, but there are a handful of ad hoc measures that could achieve at least a portion of the envisioned governance overhaul.
“A downgrade would just take Fitch to the same level as S&P and Moody’s, so the market impact is likely to be limited,” Societe Generale analysts wrote in a note. Around Europe, Britain’s FTSE 100 index was down 1.5 percent, Germany’s DAX index down 1.6 percent, and France’s CAC 40 down 1.6 percent.
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Republicans in the U.S. Congress have said the changes would cost too much
WASHINGTON: The head of the International Monetary Fund said on Friday the global lender was ready to discuss ways to move forward without the United States on reforms that would give emerging markets greater IMF voting power. IMF member nations agreed on so-called quota reforms in 2010, with the strong backing of the Obama administration, but the US Congress has so far failed to give the changes a needed stamp of approval. US lawmakers are preparing to leave town for the year without backing the reforms, meaning the United States will miss a deadline the Group of 20 leading nations had set for action. “I have expressed my disappointment to the U.S authorities and hope that they continue to work toward speedy ratification,” IMF Managing Director Christine Lagarde said in a statement. “As requested by our membership, we will now proceed to discuss alternative options for advancing quota and governance reforms and ensuring that the Fund has adequate resources, starting with an Executive Board meeting in January 2015,” she said.
The agreed changes would double the Fund’s resources and hand more IMF voting power to countries such as Brazil, Russia, India, China and South Africa. It would also revamp the IMF’s board to reduce the dominance of Western Europe.
Some Republicans in the U.S. Congress have said the changes would cost too much at a time Washington was running big budget deficits. The reforms also ran afoul of a growing isolationist trend among the party’s influential Tea Party wing.
It is not clear how the IMF might proceed without the United States, given that Washington is a controlling shareholder in the Fund, but there are a handful of ad hoc measures that could achieve at least a portion of the envisioned governance overhaul.
“A downgrade would just take Fitch to the same level as S&P and Moody’s, so the market impact is likely to be limited,” Societe Generale analysts wrote in a note. Around Europe, Britain’s FTSE 100 index was down 1.5 percent, Germany’s DAX index down 1.6 percent, and France’s CAC 40 down 1.6 percent.
[You must be registered and logged in to see this link.]
