In late October the G7 took limited steps to strengthen the international financial architecture, after the World Bank-IMF annual meetings ended with a plethora of proposals but no substantive agreement. The G7 has backed president Clinton’s plan to establish a new precautionary finance facility for the IMF, which will provide short-term loans at market rates to countries pursuing IMF approved policies threatened by financial contagion. No additional conditionality will be attached to the loans. International support for the US proposal was given after Congress finally approved the IMF request for more money which will fund the new facility. The IMF loans will also be supported by bilateral loans and involve the private sector.
In addition to improving transparency, policy-making procedures, surveillance and regulation the G7 statement also gave commitments to:
- examine Gordon Brown’s proposal for a Standing Committee for Global Financial Regulation, which would bring together the IMF, World Bank, Basel Committee and other national and international regulatory institutions;
- implement the Canadian proposal to allow the IMF to lend to countries in arrears on its loan repayments;
- assess proposals to increase the power of the IMF Interim Committee and the World Bank Development Committee;
- support the more active use of World Bank guarantees.
for the Declaration of G7 Finance Ministers and Central Bank Governors see www.imf.org
A group of US NGOs and academics have begun meeting on the financial architecture questions. Contact Jo-Marie Griesgraber, Center of Concern, 1225 Otis Street, NE, Washington, DC 20017USA, Tel: + 1 202 635 2757, Fax:+ 1 202 832 9494, coc@coc.org
