Jan Kregel of the UN Department of Economic and Social Affairs, argued that the generally held belief that IMF quotas were sufficient was wrong. By looking at the issue in the aggregate, observers are overlooking the fact that quotas are insufficient for many individual countries. Kregel also pointed out that the terms of the new contingent access line in the IMF strategic review were “not extremely generous” and uncertainty remained over how onerous will be proposed ‘pre-screening’. Interesting was Kregel’s assertion that regional cooperation arrangements were acting “as equivalents to capital controls”.
Brad Setser of Roubini Global Economics outlined what he believed were three strategies employed by the IMF in resolving crises. The key difference he believed was between Brazil and Turkey, where there was little or no debt restructuring since a large proportion of debts were domestically held, and Uruguay and Argentina where there was a rescheduling sovereign debt.
Frank Fernandez of the US Securities Industry Association, recommended four activities for a revitalised Fund. More of the “boring stuff” – article IV consultations, financial sector assessments and credit information; public-private dialogue on a code of conduct for investors; increased surveillance of global financial markets; and reforming itself to stop micro-managing country exposure and encouraging greater development of domestic capital markets.