Monday, April 20, 2015

Reuters Recaps IMF Spring Meetings

Here is a link to a pretty comprehensive Reuters recap of the IMF Spring Meeting. Just in case you don't catch it when you read the article, a number of folks are unhappy that the US has yet to approve the 2010 IMF reforms. Below I selected various quotes about this from the Reuters article. Also below I added links to the Chrstine Lagarde opening press briefing and the official IMF statement about the meeting.




"We (G20) put out two options: de-linking and ad hoc. ... We're in favor of the more strict option, de-linking. Because we see difficulties in getting (the quota reforms) through Congress for the third year, so we don't see any basis for optimism."
"We strongly urge the U.S. Congress to quickly approve the 2010 IMF quota reform agenda. It's five years - too long time, too much delay. That's damaged the reputation of the IMF, damaged the reputation of the G20 and also damaged the image of the United States. I hope that the U.S. Congress can accept the proposal recently made ... more quick to conclude their internal debate."
"There was heightened frustration among emerging economies on delays in IMF quota reform ... I heard more complaints about it than last year."
"We have instructed for the executive board to look into interim steps ... at the end there was no other discussion about any objective than the 2010 reform."
My added comments: Then we have this below from the Chrisine Lagarde opening press briefing and the IMF official statement for the meeting.
Lagarde Press Briefing
Regarding the stalled IMF reforms:
"But it is a case that the Quota and Governance Reform of 2010 has not been delivered upon, that we are still short of one major ratification out of this country, the United States of America. Under those circumstances, I can fully understand why some of the other countries are frustrated and impatient to see that reform actually implemented.
So, I am not only calling for action by policymakers to act together to make sure that, to get it good, it eventually gets better, but I am also calling on the United States to actually obtain ratification of that reform so that the institution can continue to be representative of the entire community as it evolves."
Regarding the adding of the Yuan to the SDR basket
"Question - Madame Lagarde, when you were in Beijing last month, you said that the inclusion of the renminbi in the SDR basket is not a question of if but a question of when. So, I just wonder what kind of efforts or measures could the Chinese government take in order to speed up this process. Also, later this year, the IMF is going to have the five-year review of the SDR. What kind of changes are we likely to see after this round of review?
Ms. Lagarde - Well, I was actually asked properly and officially by the Chinese authorities to include a review of the current situation of the renminbi with a view to including it in SDR basket. As you know, the review takes place every five years. The next one will be before the end of 2015. The Chinese authorities know quite well what is desirable, what needs to be changed and improved in monetary policy and in the financial sector in China.
I believe that what the Chinese authorities have actually indicated in terms of liberalization of interest rates, in terms of the opening up of the capital account, in terms of deepening of the financial markets actually will naturally be conducive to an assessment of whether or not the renminbi is freely usable, which is, as you know, one of the key criteria. The other one is the export capacity, and I think on that one nobody has any doubt as to whether or not China fits the bill.
So, this is a process that we will embark upon, that we have begun working on together with the Chinese authorities. As I said, technical work needs to be applied to it on both sides, by the Chinese authorities themselves and they have announced it, and by us to just assess and determine whether that second criterion is actually met."
From the Official IMF Statement:
"We remain deeply disappointed with the continued delay in progressing the 2010 IMF Quota and Governance Reforms. Recognizing the importance of these reforms for the credibility, legitimacy, and effectiveness of the IMF, we reaffirm that their earliest implementation remains our highest priority. We continue to urge the United States to ratify the 2010 reforms as soon as possible. Mindful of the aims of the 2010 reforms, we call on the IMF Executive Board to pursue an interim solution that will meaningfully converge quota shares as soon as and to the extent possible to the levels agreed under the 14th Review. We will use the 14th Review as a basis for work on the 15th Review of Quotas, including a new quota formula. We reaffirm our commitment to maintaining a strong, well-resourced, and quota-based IMF."
My added note: Here again we see disappointment expressed about the stalled 2010 IMF reforms. Earlier the IMF had said it would address some kind of Plan B on the stalled reforms by June of this year. This statement makes no mention of any timing for any future IMF actions.

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