Reply #51: IMF split on recession exit strategy / Can the IMF now feed the world / IMF to issue obligations

[BelgianMadCow]

The G20 happy face can't keep the tug of war from showing up...

IMF split on recession 'exit strategy'

• Strauss-Kahn fears disagreement on withdrawing stimulus packages
• European governments resist changes in IMF structure

Cracks were today appearing in the united front presented at the London G20 Summit, as the International Monetary Fund failed to deliver reforms of global finance and governance.

Finance ministers meeting in Washington disagreed over when it would be safe to withdraw recession-busting policies, and were unable to finalise a $500bn (£350bn) boost to the IMF's resources.

more: http://www.guardian.co.uk/world/2009/apr/26/washington-imf-split-on-recession-policies

Can the IMF now feed the world?

The London G20 summit tripled the resources of the International Monetary Fund and made it a major force again, responsible for saving national economies hit by the global crash. But given its recent track record, will its policies do more harm than good? Heather Stewart reports from Washington
...
Brown had hoped to reach a grand bargain on the future of the Washington financial institutions at the G20 - indeed, in the early planning stages, the London summit was envisaged as a new Bretton Woods, echoing the gathering after the second world war that set up the IMF and the World Bank. Britain was optimistic that emerging economic powers, especially China, with its huge foreign currency reserves, could be persuaded to stump up more cash for development in exchange for more influence in decision-making.

What emerged was a giant sticking plaster. There was little new up-front money: much of the trumpeted trebling of IMF resources is still to be found, and the inevitable arguments about influence at the table in Washington were left to another day. China and Russia said they wanted to see a serious examination of the problems caused by the dominance of the dollar - and by implication the US - over the world economy; everyone else quietly ignored them.

In fact, the G20 gave Brown himself the job of coming up with sealing the next stage in the process. He has promised to "consult widely in an inclusive process and report back to the next meeting with proposals for further reforms to improve the responsiveness and adaptability" of the Bank and the IMF.

more: http://www.guardian.co.uk/business/2009/apr/26/imf-g20-lending-global

Very interesting article with views from a lot of perspectives. Check out the Bob Geldof one - ouch! Also has a reality check on IMF behaviour in the past and up to the present.

And the last one, which made me check elsewhere about the IMF meeting, is from our local financial paper, so I translated it (didn't find another link for it) on edit: Ozy's post number 4 also has a snip about IMF-issued obligations..:blush:

IMF considers issueing obligations

The IMF considers selling obligations to a number of emerging economies, amongst other Brazil. The proceeds of that sale will be used to combat the economic crisis. This came up during a meeting of the World Bank and the IMF this weekend in Washington. The IMF has never issued obligations before.

Amongst others, Brazil and China have shown interest. With the issuance of obligations member states get a new way to provide the IMF with cash. The fund can use this cash to finance more loans and to help member states cope with the economical crisis.
...
The brazilian finance minister Guido Mantega calls the proposal on the table now 'insufficient' and 'premature'. Brazil wants the obligations to have a higher return than American Treasuries. Mantega also states a contribution by the 4 largest emerging economies will depend on internal IMF reform.

source: http://www.tijd.be/nieuws/economie-financien/IMF_overweegt_uitgifte_van_obligaties.8175265-600.art

hmmmmm...so the debt would be issued by the IMF, and be more profitable than Treasuries...this sounds pretty important to me, can some of you make sense of this?

regards
bmc