In an earlier post we asked if there might be a global power struggle underway over voting rights at the IMF. Today the NY Times runs a full article discussing this topic in depth. What is the title? The IMF needs a "RESET".
We have noted how the term reset is showing up everywhere these days. This NY Times article talks about the rift ongoing between some Western nations and the emerging nations led by the BRIC nations. A topic we have covered here quite a bit. One thing to think about: whenever a significant change in monetary system power might be approaching, you can suspect that the various players at the table are going to be looking to improve their position as much as possible. And any resets involving currencies probably cannot move forward until all the players are on the same page.
Here some quotes from the NY Times article:
"But the I.M.F. is experiencing a crisis of governance. The governments of big developing countries have become frustrated with the unwillingness of Western countries to adjust the distribution of power in the fund in line with their rising economic weight. Frustration has encouraged some to explore bypass institutions, such as the development bank and the currency-pooling scheme being negotiated among the BRICS (Brazil, Russia, India, China, South Africa)."
"The overwhelming majority of I.M.F. member states approved the changes (to adjust distribution of power), but more than three years later the quotas and votes remain unchanged because the United States Congress has still not approved what the executive branch agreed to. Without congressional approval the whole readjustment remains paralyzed."
"2014 is the 70th anniversary of the Bretton Woods conference at which the International Monetary Fund and World Bank were founded. Breaking the deadlock in I.M.F. governance reform would help to ensure that emerging-market and developing countries see the fund as a cooperative of states — and no longer a device for Western countries to impose their conditions on others. It also would boost the prospects for international financial stability, and not incidentally, constitute a triumph for President Obama and the I.M.F.’s current managing director, Christine Lagarde."