IFI governance

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IMF needs internal “firewall”

1 April 2003

A senior British official has made proposals for a greater separation between the surveillance and lending functions at the IMF, in order to strengthen crisis prevention. Citing recent failures in Argentina and Turkey, Chief economic adviser Ed Balls argues the IMF should be “as credible and independent from political influence in its surveillance … as an independent central bank”. This would suppose building an “institutional firewall” between the different functions of the Fund to avoid conflicting incentives. The idea is likely to be tabled at the IMF Finance Ministers’ meeting mid-April, chaired by UK Chancellor Gordon Brown.

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