Monday, February 24, 2014

G20 "Deeply Regrets" IMF Reforms not approved yet

It is clear that another push will be made to attempt to pressure the US Congress to approve the 2010 proposed IMF reforms we have mentioned here several times. In this article, the rhetoric gets ramped up some. Here are some quotes:

SYDNEY — G20 finance ministers and central bank governors on Sunday said they "deeply regret" IMF reforms have stalled with the United States yet to ratify them.

"Our highest priority remains ratifying the 2010 reforms, and we urge the US to do so before our next meeting in April," they said in a final communique after a meeting in Sydney.

"These reforms are critical to ensure that the IMF represents its entire constituency," Hockey told reporters, adding that it had moved beyond the procedural realm to become a "structural issue for the global economy".

"We urge the US to ratify the current reforms and we will review progress in April. The importance of a strong IMF is very relevant as we speak," he added, referring to ongoing unrest in the Ukraine.

He said individual finance ministers had been monitoring developments and "it is clear that there may be economic consequences to these developments".
Emerging-market economies, including China and Brazil, have complained for years that their relatively small voting rights in the institution insufficiently reflect their real power in the world economy.

The failure of the United States, the largest stakeholder in the IMF, to approve the reforms has been the major stumbling block for developing countries to achieve a greater say in the Washington-based institution.

my comments: Here we see stronger wording with comment like this is becoming a "structural issue for the global ecnomy"  and "it is clear there may be economic consequences" if the IMF is unable to respond to a crisis such as in the Ukraine right now.

We watch this isssue closely because it could very well open the door to the start of major systemic change going forward. The nations who want more voting power do not like the current US dollar dominated global system and the resulting power it gives the US FED. If the FED pumps in or sucks out money, it immediately impacts the global system as we have clearly seen lately. That is why this issue is important. It could lead to major changes that dethrone the US dollar as world reserve currency.

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