IMF Articles change on hold

15 December 1998

Action to change the IMF‘s Articles of Agreement to extend the Fund’s purview to cover capital account liberalisation has been put on hold since the financial crisis. Some governments still think financial liberalisation is beneficial, but in the current political climate are concerned that any agreement would be too weak.

World Bank Chief Economist Joe Stiglitz recently noted that following the bailout of Long-Term Capital Management and the spread of financial contagion to Latin America “the evidence concerning the risks which such liberalization brings is overwhelming, but evidence concerning the benefits is far more scanty.”