CRS Report for Congress
IMF Reform and the International Financial
Institutions Advisory Commission
Updated January 5, 2001
J. F. Hornbeck
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division

Congressional Research Service The Library of Congress

IMF Reform and the International Financial Institutions
Advisory Commission
In the fall of 1998, financial crises in Asia, Russia, and Brazil were unfolding,
though in different stages, as the 105th Congress was in the process of passing the
Omnibus Consolidated and Emergency Supplemental Appropriations Act for FY1999
(H.R. 4328, P.L. 105-277). This legislation increased the U.S. quota of the
International Monetary Fund (IMF), but attached a number of conditions to dispersal
of the funds. Among them was creation of the International Financial Institutions
Advisory Commission (the Meltzer Commission), which Congress chartered to
evaluate and recommend future U.S. policy toward the global financial institutions,
particularly the IMF.
The Commission released its report on March 8, 2000, calling for changes in the
mission and operations of the IMF and the development banks. The 11
commissioners were unanimous only in generally recommending that: 1) the IMF
restrict its lending to short-term liquidity needs, and 2) that it forgive debt to the
poorest developing countries. The report makes the case for restructuring the IMF
to reduce and define clearly its mission, and clarify obligations for members of the
Fund, as well. At the heart of the proposal is a strong conviction that deep structural
reforms, particularly of developing country financial systems, would go a long way
toward reducing the potential for currency crises and the related need for large, costly
IMF bailouts. It also focuses heavily on the role of moral hazard. These concerns led
to specific policy prescriptions, not unanimously embraced, including requiring
financial sector reforms as a precondition for IMF assistance, lending for no longer
than 120 days (with one rollover period) and at “penalty” rates, and eliminating any
long-term lending for structural adjustment or poverty reduction.
Four members of the Meltzer Commission dissented from the report. They
supported the call to differentiate clearly the responsibilities of the IMF and
development banks, the need for stricter banking systems in developing countries,
greater transparency to mitigate abuse by all parties, and debt forgiveness for the
poorest countries. They disagreed with the details listed above, arguing that they
would conceivably worsen rather than improve the prospect for global financial
stability and thereby undermine the fight against poverty and slow development.
A number of respondents to the Commission report also disagreed with what
some consider its “narrow” prescriptions, including the U.S. Treasury and the Council
on Foreign Relations, which offer alternative reform programs. In addition, financial
crises have been a part of the international economic landscape long before the IMF
was established, suggesting that too much emphasis on this one institution may not
bring the desired stability to the international financial system. Still, the IMF is
responsible for addressing the concerns raised by Congress and other government
institutions around the world, which have served as a critical impetus for change.
Continued oversight will be necessary to keep the reform process moving and more
time may be needed to sort out precisely which policy options will suit the collective,
but competing, needs of IMF member countries and the broader participants of the
global economy.

The IMF and the Evolving International Economy.......................1
The Meltzer Commission Report....................................4
Foundations of the Argument...................................5
Meltzer Commission Recommendations...........................6
Meltzer Commission Dissenting Opinions.............................8
U.S. Treasury Response..........................................9
Council on Foreign Relations Report................................11
Reform Proposals Compared......................................13
Balancing Perspectives..........................................15
Appendix 1. Selected IMF Reform Proposals.........................19
List of Figures
Figure 1. Total IMF Credit Outstanding 1949-1999...................3
List of Tables
Table 1. IMF Purchases by Major Crisis Countries, 1995-99...............4

IMF Reform and the International Financial
Institutions Advisory Commission
In the fall of 1998, as the financial crises in Asia, Russia, and Brazil were
unfolding, though in different stages, the 105th Congress was debating a proposed
quota increase for the International Monetary Fund (hereafter the IMF or the Fund).
At that time, the IMF’s struggle to contain these crises strained its financial resources
and subjected it to increasing criticism. Following a vigorous debate, Congress
approved funds for the quota increase in the Omnibus Consolidated and Emergency
Supplemental Appropriations Act for FY1999 (H.R. 4328, P.L. 105-277), but
attached a number of conditions to their disbursal. Among them was creation of the
International Financial Institutions Advisory Commission (hereafter the Meltzer
Commission), which Congress chartered to evaluate and recommend future U.S.
policy toward the global financial institutions, particularly the IMF.
Following six months of study and hearings, the Meltzer Commission released
its report on March 8, 2000, calling for significant changes in the mission and
operations of the IMF and the development banks. The report was approved by an
8-to-3 vote that included dissenting opinions by a number of commissioners. The
commissioners were unanimous, however, in their general recommendations to
restrict IMF lending to short-term liquidity needs and eliminate extended loan
programs for other purposes. This CRS report provides background and analysis on
findings and reforms advocated in the Meltzer Commission report, including selected
alternative perspectives and critiques that have emerged.
The IMF and the Evolving International Economy
The International Monetary Fund, conceived at the Bretton Woods conference
in 1944, is the institution designed to support global trade and economic growth by
helping maintain stability in the international financial system. Initially, the IMF
served primarily industrialized countries by supporting currency convertibility and
providing them with short-term financing when needed to defend their pegged
exchange rates. With the demise of the fixed exchange-rate system in 1973, and the
huge growth and liberalization of the private international capital markets, industrial
countries soon found little need to draw on the Fund. At this point, the IMF
increased its assistance to developing countries, some of which were finding
themselves increasingly embroiled in financial problems.1
Most IMF lending draws from the Fund’s permanent assets (some $283 billion),
provided by member countries (the capital subscription or quota) as part of their

1 For more on how the IMF functions, see: CRS Report RL30575, The International
Monetary Fund: An Overview of Its Mission and Operations, by J. F. Hornbeck.

commitment when they join the fund. In addition to being the financial resources of
the Fund, the quota is important because it determines a country’s voting power and
borrowing capacity. The IMF maintains two borrowing arrangements with selected
member countries, as well, for times when the Fund may not be sufficiently liquid to
meet all borrowing needs. The General Arrangements to Borrow (GAB) is a $23
billion credit line established by 11 industrialized countries in 1962. The New
Arrangements to Borrow (NAB) was established following the 1994-95 Mexican peso
crisis as a supplemental line of credit by 25 member countries, adding another $23
billion of currency borrowing authority.
IMF lending involves providing hard currencies to member countries with
balance of payments problems based on need, willingness to adjust policies, and ability
to repay. Three types of financing facilities are available under the general resources
account: 1) the stand-by arrangement; 2) the extended arrangement (these two
constitute most IMF assistance); and 3) special facilities. Two programs created since
December 1997, the Supplemental Reserve Facility (SRF) and the Contingent Credit
Line (CCL), amount to special access policies to stand-by and extended arrangements
under extenuating circumstances. As part of the IMF’s evolving sense of mission, it
has developed lending facilities to address the needs of the poorest developing
countries: the Poverty Reduction and Growth Facility (PRGF) – renamed in
November 1999 from the Enhanced Structural Adjustment Facility (ESAF); and the
Heavily Indebted Poor Countries (HIPC) initiative.
Although the IMF has operated for over half a century in an evolving and at
times volatile global economy, it was the severity and frequency of the 1990s financial
crises that rekindled the recent debate over its core mission. Many competing
perspectives have developed, but there are some common starting points to consider.
First, since the end of the Bretton Woods era in 1973, the IMF has redirected its
attention towards the developing world. Second, IMF arrangements have grown in
size and maturity, as it has taken on increasingly larger financial “bailouts.” Third, the
Fund has expanded its role as a development organization through concessional loan
programs to very poor countries. Fourth, short-term balance of payments lending has
given way to global financial crisis management.
Figure 1 provides a sense for what some consider the IMF’s evolving mission.
For roughly the first three decades, total IMF outstanding credit was small by
historical standards, peaking at SDR2 13.7 billion in 1977, much of the increase
related to financing severe, but temporary balance of payments deficits of oil
importing countries during the mid-1970s oil price shocks. Data for the past two
decades point to two additional distinct periods documenting the IMF’s elevated
exposure to broader global financial troubles. First, the debt crisis in Latin American
during the 1980s required vastly greater resources as the IMF took the lead in
coordinating the response among the private banks, multilateral financial institutions,
and individual bilateral creditors to avoid massive default. The IMF’s exposure is

2 The Special Drawing Right (SDR), created in 1970, is an international reserve asset and unit
of account used to settle transactions at the IMF. Its value is calculated as a weighted average
of five “hard” currencies, making it a more stable international asset than a single currency,
such as the dollar, which used to be the key international reserve currency.

Figure 1. Total IMF Credit Outstanding 1949-1999
clearly visible in its increased lending, peaking at SDR 37.6 billion in 1985 (nearly
three times the previous high in 1977).
Second, beginning in 1995, a series of individual country financial crises resulted
in unprecedented IMF lending. First, the Mexican peso crisis unfolded abruptly in
December 1994. As Mexico’s problems began to wind down, a larger Asian financial
crisis erupted in 1997, with Russia and Brazil following on its heels in 1998 and 1999,
respectively. These incidents collectively drained IMF funds, with total credit
outstanding rising over six fold from SDR 10 billion in 1980 to SDR 67 billion in
1999. Liquidity concerns, along with new policies developed to make access quicker
and pleas for additional resources (in both the quota and borrowing limits), pushed
the IMF debate to center stage.3
During the 1990s, the concentration of IMF lending was particularly evident.
Table 1 shows the percentage of total IMF purchases (draws) to the major crisis
countries since 1995. It includes those made through the Supplemental Reserve
Facility after 1997 and comprises roughly 90% of the SDR value of IMF purchases4
for any given fiscal year. As may be seen, Russia has been a significant user of IMF
funds since 1995. In 1995 and 1996, when the Mexican peso crisis hit, Russia and
Mexico together accounted for 56.8% and 67.4% of IMF purchases, respectively. In
fiscal 1997, Russia was the only major borrower, constituting 42.6% of total draws.

3 The immediacy of liquidity concerns has since subsided some given large repurchases
(effectively repayments) by Brazil, Korea, and Russia in 2000. See: IMF, Annual Report

2000, pp. 123-24.

4 These calculations do not include data from the small concessional PRGF loan facility.

With the advent of the Asian and Brazilian problems, the major crisis countries
collectively accounted for 89.8% and then 82.9% of IMF purchases during fiscal 1998
and 1999, respectively.
Table 1. IMF Purchases by Major Crisis Countries, 1995-99
(percent of total IMF purchases or draws by fiscal year)
Country 1995 1996 1997 1998 1999
Mexico 50.0% 32.2%
Indonesia 12.5% 19.1%
Thailand 11.6% 2.3%
Russia 6.8%35.2%42.6% 7.5%18.7%
Sub-Total 56.8% 67.4% 42.6% 89.8% 82.9%
All Others43.2%32.6%57.4%10.2%17.1%
Total100.0% 100.0% 100.0% 100.0% 100.0%
Source: International Monetary Fund, Annual Report, various years.
* Includes all Supplemental Reserve Fund commitments beginning in 1998; does not include
PRGF concessional loan facility data.
If the mission of the IMF were to be defined by its lending portfolio, figure 1
and table 1 would suggest that its primary purpose is to lend to countries with major
currency crises rather than those with short-term, non-crisis balance of payments
problems. Among the fundamental questions that have arisen from this global posture
of the IMF are: is the Fund “succeeding” in meeting its core mission of supporting
international financial stability, and does the expectation that crisis lending will occur
contribute to the possibility of future runs on currencies?
The Meltzer Commission Report
In appropriating funding in the fall of 1998 to increase the U.S. quota in the
IMF, Congress required that an independent commission be created to evaluate the
international financial institutions, giving particular attention to the IMF. The
International Financial Institutions Advisory Commission (hereafter the Meltzer
Commission) was given six-months to present a detailed report to Congress.
Professor Allan H. Meltzer of Carnegie Mellon University, historically a staunch critic
of the IMF, was named commission chair.5

5 See: Meltzer, Allan H. Shut Down the IMF. American Enterprise Institute for Public Policy

The final report reflects the overarching view that the IMF has overstepped its
mission of supporting international financial stability by increasingly undertaking large
bailouts of countries in severe economic and financial crisis. Not all commissioners
agreed, as reflected in the split 8-to-3 vote approving the final report and in its
publication with detailed dissenting opinions. There was consensus on two issues,
however, both pointing to reducing the size and scope of the Fund. First, the
Commission proposed that the IMF restrict its lending to only short-term liquidity
needs of member countries and eliminate its role as a long-term lender, particularly
for purposes of reducing poverty or promoting development. Second, the IMF, the
World Bank, and the regional development banks should write-off all the debt from
the so-called Heavily Indebted Poor Countries (HIPCs).6
Foundations of the Argument
The Meltzer Commission report builds its case for redefining the IMF mission
based on the following arguments:
1.Since the IMF’s creation in 1944, its core mission of supporting global
financial stability remains, but an international financial system based on a
gold/dollar standard of pegged but adjustable exchange rates and capital
controls no longer exists. Since 1973, most industrial countries have
adopted flexible exchange rates and strengthened their central banks
(lenders of last resort), effectively eliminating their need for IMF assistance;
2.The IMF, in response, adjusted its mission by turning to the developing
world, where it has made increasingly large and longer-term loans to crisis
countries, and in some cases, has provided concessional loans to the
poorest developing countries. According to the report, “mission creep” has
led to requests by the IMF for additional financial resources and powers;
3.IMF assistance and conditionality have led to an “unprecedented” amount
of influence for a multilateral institution over borrowing countries and
fostered their increased dependence on the Fund. Overall economic and
development results, however, have been disappointing;
4.The IMF has proven to be poorly suited to anticipate financial crises, slow
in dispensing financial assistance, and prone to pushing pro forma policy
advice that can compound rather than alleviate problems. The severity and
recurrence of these problems suggests that the preventative and coping
mechanisms as currently practiced by the IMF are not adequate;
5.The most significant problem related to IMF programs, particularly since
the Mexican bailout in 1995, has been the rise of moral hazard, or the over

5 (...continued)
Research. August 1995.
6 Report of the International Financial Institution Advisory Commission. Allan H. Meltzer,
Chairman. Submitted to the U.S. Congress and U.S. Department of the Treasury. March 8,


commitment of particularly short-term financing by private investors and
lenders to developing countries in part because of an expectation, based on
previous experience, that the IMF will provide the foreign exchange
liquidity that will allow them to exit the country in time of crisis and
without bearing their full losses (Russia is the most prominent example);

6.The report lists a number of other problems internal to the IMF including:

failure to enforce IMF conditions uniformly; poor transparency; political
manipulation of the IMF by G-7 countries; lack of independent oversight;
and overlap of mission with other international financial institutions.7
Meltzer Commission Recommendations
The Meltzer Commission makes the case for restructuring the IMF to as part of
a more targeted and much reduced mission, with redefined obligations for members
of the Fund, as well. At the heart of the proposal is a strong conviction that deep
structural reforms, particularly of developing country financial systems, would go a
long way toward reducing the potential for currency crises and the related need for
large, costly IMF bailouts. Specific report recommendations are grouped below.
Redefine the IMF’s Mission. The IMF should be restructured as a smaller
organization with three distinct responsibilities: 1) act as a “quasi-lender” of last resort
that would restrict lending to short-term liquidity assistance; 2) collect and
disseminate country financial and economic data on a timely basis; and 3) provide
advice on economic policy rather than impose conditions. Loans would be made only
to those countries that had met “preconditions” of financial soundness, except under
“unusual” circumstances where stability of the international financial system is at
stake. All other long-term lending should cease, particularly long-term concessional
lending to the poorest countries, to differentiate clearly the IMF’s mission from that
of the development banks. As a result, the Commission sees no need to consider any
additional quota increase in the foreseeable future.
Participation in IMF Programs. All member countries should provide
accurate and timely economic and financial information for all market participants to
use, both private and public. IMF lending would not be extended to large industrial
countries because Fund resources are inadequate to cover their potential needs; in any
case they should not be needed in countries with flexible exchange rates and the
means to act as their own lenders of last resort. Neither would there be any need to
conduct Article IV consultations with developed countries. The IMF could offer
policy advice, but the precondition of prudent standards would theoretically obviate
the need for the current elaborate conditions for lending.
Rules (preconditions) for Lending. To become eligible for IMF assistance,
member countries would need to meet four preconditions or minimum prudential
standards: 1) allow entry of foreign financial institutions to deepen competitiveness,
reduce corruption, and diversify risk in the banking system; 2) require that domestic

7 The Commission does not necessarily endorse all these criticisms, but cites them as the
framework from which reform is discussed. Meltzer Commission Report, pp. 38-42.

banks be adequately capitalized to establish market discipline; 3) publish the maturity
structure of outstanding sovereign and guaranteed debt, and off-balance sheet
liabilities to encourage safe and sound behavior; and 4) meet a “proper” fiscal
requirement so the IMF would not be used to support irresponsible budget deficits.
The IMF should not lend to salvage insolvent financial institutions. The Commission
believes that adopting higher IMF-set financial standards and discouraging short-term
borrowing can reduce the potential for moral hazard.
Terms for Lending. To support the basic mission of liquidity lending, IMF
loans should have short maturities (not to exceed 120 days and one roll-over period),
a graduated penalty rate (above sovereign yield), and an explicit legal priority for
repayment. Defaulting countries would not be eligible for additional lending by any
multilateral agency or IMF member countries, and credit limits would be clearly
defined and strictly observed. The new rules could be phased in over three to five
years to allow countries time to meet new requirements, with IMF supporting crises
in the mean time, but at high loan penalty rates. Extraordinary circumstances for
borrowing such as natural disasters, political turmoil, or emergency assistance should
be done through the relevant multilateral development institutions (United Nations,
World Bank) or bilateral arrangements.
Exchange Rate Policy. To permit the greatest latitude for adjusting to changes
in both domestic policy choices and external economic events and to avoid costly
attempts to stave off devaluations, countries should shun any of various adjustable
peg exchange rate systems, relying instead on either a firmly fixed or flexible exchange
rate regime. More importantly, countries should be strongly encouraged to adopt
appropriate “stabilizing monetary and fiscal policies” to reduce the possibility of
economic shocks that might require dramatic adjustment in either the exchange rate
(devaluation) or price level (interest rates).
Debt Issues. IMF arrangements historically (e.g. the 1980s Latin American debt
crisis and 1994 Mexican peso devaluation) have kept private lenders and investors
from realizing their full losses and having to implement debt restructuring on their
own. Sovereign borrower and lender conflicts should be worked out by the
participants without resorting automatically to IMF assistance. In the case of the so-
defined Heavily Indebted Poor Countries (HIPCs), however, all IMF (and other) debt
should be written off because of their inability to repay “under any foreseeable future
developments.” Debt relief would be contingent upon debtor countries implementing8
broad reforms and adopting an “effective” development strategy.
IMF Finance and Accounting Reforms. The Fund’s accounting system should
be simplified and rationalized to improve transparency and better approximate
standard accounting procedures that reflect assets and liabilities in meaningful ways
(such as distinguishing between the usefulness of various currency holdings.) In

8 For more on the HIPC initiative and developing country debt, see: CRS Report RL30214,
Debt Reduction: Initiatives for the Most Heavily Indebted Poor Countries, by Larry Nowels,
and RL30449, Debt and Development in Poor Countries: Rethinking Policy Responses, by
J. F. Hornbeck.

concert with the proposed reduced role of the IMF, no further quota increases should
be considered in the foreseeable future.
Meltzer Commission Dissenting Opinions
Four members of the Meltzer Commission dissented from the report and three
formally voted against it, although they were agreed on the need for IMF reform.
They supported the report’s call to differentiate clearly the responsibilities of the IMF
and development banks and its conclusions that stronger banking systems in
developing countries are imperative, that greater transparency mitigates abuse by all
parties, and that the poorest countries need debt forgiveness and grants from
industrial countries to help cover basic public goods. The dissenting opinion
disagrees, however, with the details on how to achieve these goals.
Dissenting commissioners had varied opinions, but the collective dissenting
statement challenges the report on its analysis, interpretation, and recommendations
regarding the role of the IMF in the international economy. The dissenters suggest
that the report’s analysis mischaracterizes the effects of international financial
institutions over the past five decades. They contend that the international economy,
despite periods of volatility, has performed well since World War II and countries
with severe financial problems have all been helped by IMF assistance. These include
most of those that faced crises in the 1990s (Indonesia and Russia being the
exceptions), which have since “experienced rapid V-shaped recoveries.”
The dissenters also point out that while the report criticizes the international
financial institutions for undermining democracy by dictating policies that should be
domestically determined, the past decade has witnessed an unprecedented transition
to democracy in much of the world. The dissenting commissioners argue that the
Commission recommendations, if implemented, might actually worsen rather than
improve the prospect for global financial stability and thereby potentially undermine
the fight against poverty and underdevelopment. They also maintain that the
recommendations are not well supported by evidence in the report.
Promoting Financial Instability. Dissenters argue that the report’s key
recommendation that the IMF restrict its operations only to countries that prequalify
for assistance based on reforming their financial systems and do so without IMF
authority to impose policy conditions is a flawed strategy because: a) the authority to
impose policy changes is necessary to encourage macroeconomic corrections, such
as insisting huge fiscal deficits be reduced; otherwise, IMF assistance might fuel rather
than fight the crisis; and b) those countries that would not or could not meet IMF
standards would be at even greater risk of turmoil if a financial problem arose. To the
extent that this might include large developing countries, the international economy
may be at greater risk of systemic financial upheaval.
Dissenters found fault with five of the reports key “lines of analysis.” These are
listed below, with the dissenters response following in parentheses:
•the main problem is moral hazard, (for which dissenters claim there is little
empirical evidence);

•“penalty” rates will deter excessive borrowing (dissenters assert that
borrowing will not be tempered by higher costs during a liquidity crisis);
•the IMF fails to require banking reform in crisis countries (when it actually
•literature on the effectiveness of IMF “conditionality” has been represented
as negative (when actually it is more balanced); and
•there is no discussion of what would happen in the absence of IMF
assistance (which some argue could lead to worse outcomes).
Undercutting the Fight Against Poverty. The dissenting opinion argued
against the report’s recommendation to terminate long-term poverty lending at the
IMF as it could militate against poverty reduction efforts, as would relying only on
appropriations from rich countries to fund assistance to poor countries. The IMF’s
Poverty Reduction and Growth Facility (PRGF) is represented as helping millions of
the world’s poorest people and worthy of continued support. Further, the report’s
recommendation that advanced developing countries rely only on private capital
markets for external finance could hurt them during times of financial market volatility
or panic.
Unsubstantiated Proposals. Dissenters also criticized the lack of detailed
evidence in support of pursuing many of the Commissions’ proposals, suggesting that
without more thorough documentation, the report presents opinion as much as
reasoned analysis. Other questions were raised regarding the wisdom of: 1)
precluding the IMF from assisting high-income countries; 2) requiring countries to
adopt only selected exchange rate systems; 3) insisting on separate new rules or ideas
for developing country banking systems when the Basel Core Principles have been
agreed to and serve the same purpose.
Dissenters also argued that the report failed to address some key issues, such as:
1) advocating for a better “early warning” system to respond in an anticipatory
manner to future financial crises; 2) outlining an adequate role for private sector
burden sharing in times of financial trouble; and 3) giving more attention to detailed
exchange rate options.
U.S. Treasury Response
Responding to the Meltzer Commissions recommendations, the U.S. Treasury
issued a formal report supporting the overall mission and effectiveness of the
international financial institutions, acknowledging the need for reform, but disagreeing9
with “the bulk of the Commission’s reform prescriptions.” The Treasury report
expresses the need to evaluate IMF reform in the context of how it can be done best

9 U.S. Treasury. Response to the Report of the International Financial Institution Advisory
Commission. Washington, D.C. June 8, 2000. p. 2.

to ensure that global economic challenges are met that are “critical to U.S. interests.”
This perspective is decidedly different from others regarding how to assess benefits
and direction of IMF reform. Although the U.S. Treasury makes its own detailed
recommendations, they would not result in any significant changes from the way the
IMF operates today based on continuing reform efforts largely designed with U.S.
Treasury is sympathetic to the call for developing countries to improve their
financial sectors, to become more transparent in reporting financial and economic
data, to adopt exchange rate regimes and the related policies that lend credibility and
stability to their economies, and to improve market incentives and avoid undue use
of the IMF. Treasury disagrees with the Meltzer Commission’s strategy for achieving
these goals. Treasury’s central concern is that the recommendations would not allow
the IMF to respond to future financial crises adequately, perhaps deepening and
protracting their effects abroad and in the United States, as stated in its summary of
the Meltzer Commission report:
The majority report outlines a set of recommendations for reform of the
IMF that would fundamentally change the nature of the institution. The
main objective of the commission’s proposals is to limit IMF lending to
very short-term, essentially unconditional liquidity support for a limited
number of relatively strong emerging market economies that would
prequalify for IMF assistance.10
The Treasury finds fault with this approach suggesting that: 1) it would
potentially restrict the IMF from responding to financial emergencies in many large
countries that did not prequalify, including the weaker countries that need assistance
most, perhaps aggravating broader systemic problems; 2) prequalification criteria are
too narrow, focusing on financial sector issues, which alone are not sufficient to
“significantly reduce” risk of crisis; 3) prequalified lending could increase rather than
decrease moral hazard if countries targeted policy reform for the express purpose of
meeting only IMF guidelines; 4) eliminating conditions for lending would reduce
leverage for policy change, as well as increase the possibility of financial assistance
being misused; 5) very short loan maturities and excessive interest penalties would
force repayment prematurely at excessive cost, worsening borrowing countries
already tenuous financial position; and 6) eliminating poverty assistance lending would
remove IMF and its macroeconomic expertise from the development adjustment
process involving the international financial institutions.
While recognizing a mutuality of concern between the Treasury’s perspective
and that of the Meltzer Commission, and that significant progress has been made in
reforming the IMF, Treasury proposes a different agenda for altering IMF policies to
improve its responses to financial emergencies. The general thrust of these
recommendations is in line with many others, but differs in detail. There are five
major categories of improvement suggested:

10 Ibid, p. 6.

1)Improve information flow from governments to markets, not just the IMF
“club of nations.” Treasury emphasizes importance of IMF’s new Special
Data Dissemination Standard (SDDS), with some modifications;
2)Give more attention to financial vulnerabilities, with IMF surveillance
emphasizing key liquidity indicators (e.g. debt management guidelines) and
identifying unsustainable exchange rate regimes;
3)Use IMF financing facilities more strategically, focusing on crisis
prevention and emergency situations in emerging economies. Treasury
calls for adjusting the Contingent Credit Line (CCL), using a graduated
scale of lending rates based on size of the draw to discourage excessively
large or extended lending arrangements. It is presented as the best
anticipatory response to crises that would serve better than the narrow
prequalification scheme advocated by the Meltzer Commission. The
Supplemental Reserve Facility (SRF), which provides IMF financing at
higher rates than normal stand-by arrangements, is a successful tool for
higher loan pricing and so would encourage early repayment and judicious
borrowing (Brazil being the most recent case). Treasury would not remove
the PRGF from IMF management believing it has a role to play in helping
countries enact necessary macroeconomic adjustment policies in addition
to development bank expertise in other critical policy areas.
4)Emphasize market-based solutions to crises to lessen moral hazard and
facilitate return of crisis countries to “normal market access.” It believes
the call for 100% debt relief of HIPC countries is too high to be financed
by the IFIs and developed countries. In addition, it would increase
potential for moral hazard. The idea behind the HIPC initiative is to reduce
the debt burden of very poor countries to levels of other developing
countries. Full debt relief might encourage increased indebtedness to
qualify as a HIPC country. In addition, funds forgiven are not available for
re-lending to other countries in need of borrowing, especially from
concessional facilities at the World Bank and IMF.
5)Modernize the IMF by establishing a permanent independent evaluation
office and create a liaison group of private financial market participants to
improve its understanding of global market trends. Other recommendations
counter to the Meltzer Commission included leaving future quota increase
decisions to the long-established quota review process, requiring all
countries to continue undergoing Article IV consultations (to emphasize
the “universal nature of Fund”), and suggesting that the IMF already has
priority for repayment among public and private creditor institutions.
Council on Foreign Relations Report
In a separately issued study prior to release of the Meltzer Commission report,
the Council on Foreign Relations presented the recommendations of another panel of

experts on the global financial system.11 In agreement that many of the key problems
identified by the Meltzer Commission exist, this report, the “broad thrust” of which
was supported by all 29 members, takes a complementary overall approach to
resolving these concerns. Believing that markets provide the clearest signals of
problems in the international financial system, the Council on Foreign Relations report
recommends that a market-based approach guide reform efforts in borrowing
countries. The “broad thrust,” therefore, is to “place the primary responsibility for
crisis avoidance and resolution in emerging economies back where it belongs: on
emerging economies themselves and their private creditors, which dominate today’s
international capital markets.”12
The Council report also agrees with the Meltzer Commission on some broad
policy directions including: 1) strengthening crisis prevention management; 2)
discouraging pegged exchange rates, to the point of having the IMF refuse assistance
to countries with “unsustainable” pegs; 3) refocusing the IMF toward monetary and
financial policies and away from structural reform and development needs, which are
better handled by the World Bank; 4) enhancing IMF operational transparency,
including expanded use of its Special Data Dissemination Standard (SDDS); and 5)
ensuring that individual countries take political responsibility for their economic and
financial policies and actions. It goes one step further in calling for using transparent
and nondiscriminatory tax measures as a way to control short-term capital
movements, which are viewed as a potential leading factor of financial instability.
The Council report differs from the Commission, however, on how to
accomplish specific market-based reform of IMF operations. First, rather than force
countries into a narrowly defined reform structure, the lack of which would prohibit
receiving IMF assistance, the Council on Foreign Relations report advocates an
incentive system to encourage “good housekeeping” ranging from insisting on sound
policy decisions such as fiscal responsibility, prudent debt management, and avoidance
of overvalued exchange rates, to making deeper structural changes, such as financial
sector reform, with particular attention to developing bank deposit insurance systems.
This could be accomplished, the report concludes, by lending on more favorable terms
to countries that meet these goals rather than forsaking noncomplying countries all
together, as recommended by the Meltzer Commission.
Second, IMF assistance should not be used simply to bail out private sector
lending and investment. To promote private sector burden sharing (address the moral
hazard issue), borrowing countries should use “collective action clauses” in bond

11 There is no dearth of recommendations on IMF reform. For a summary of earlier
proposals, see: Eichengreen, Barry. Toward A New International Financial Architecture:
A Practical Post-Asia Agenda. Institute for International Economics. Washington, D.C.
February 1999. pp. 101-03 and 124-32. The Council on Foreign Relations report is
presented here because: 1) it presents the collective view of 29 prominent scholars, former
senior policy officials, and private sector corporate executives; 2) it is detailed and
comprehensive; and 3) it has attracted congressional and other attention.
12 The Council on Foreign Relations. Safeguarding Prosperity in a Global Financial System:
The Future International Financial Architecture Report of a Independent Task Force. Hills,
Carla A. and Peter G. Peterson, chairs. New York, N.Y., 1999. p. 4.

contracts, for example, to ensure that all parties, public and private, are compensated
on the same terms and holdouts cannot impede attempts at orderly debt rescheduling
when widely accepted as the appropriate course of action. Where debt rescheduling
is considered necessary, the IMF should lend only if “good faith” discussions on
rescheduling are being pursued with private lenders.
Third, the Council report also recommends that the IMF not pursue large13
bailouts by limiting credit to levels defined in existing Fund guidelines. Combined
with charging higher rates of interest for riskier loans, limiting lending will reduce the
risk of moral hazard. In addition, when a financial crisis threatens the international
financial system, the Council recommends the IMF use its credit lines (the GAB and
NAB) for when countries are largely responsible for their own problems. If a
country’s financial problems are deemed largely externally driven, a separate special
“contagion facility” should be used in place of the CCL and SRF to respond to the
threat of systemic crisis. These provisions differ significantly from the Meltzer
Commission’s narrower view that only very short-term liquidity lending is needed if
reform efforts are embraced. The Council on Foreign Relations anticipates that future
speculative financial crises may require deeper, longer-term assistance, but not to the
extent that has been offered in the 1990s.
Reform Proposals Compared
Reducing the number and severity of financial crises is a universally desired goal,
but determining how best to accomplish this task and defining the IMF’s role in this
process is a hotly disputed matter. A broad range of solutions are being proposed to
improve IMF operations within the context of a changing and frequently volatile
international economy (see appendix 1 for a side-by-side comparison). Most
observers support some type of IMF reform including clarifying its mission relative
to the development banks, reconsidering how it can emphasize prevention and greater
private sector participation in negotiating more orderly workouts of financial crises,
and determining how the Fund can best serve as a catalyst for financial reform in
developing countries.
There is also broad agreement that the IMF should operate as a monetary
institution focusing on fiscal, exchange rate, and monetary policies and leave long-
term structural reform to the development banks. Less agreement exists on the
disposition of the Poverty Reduction and Growth Facility (PRGF). The Meltzer
Commission would close it, the dissenters resist this idea, the U.S. Treasury actively
supports its continuation, and the Council on Foreign Relations makes no specific
recommendation. Operational changes at the IMF that are widely embraced include
promoting greater transparency in virtually all aspects of information gathering and
dissemination including adopting a standardized presentation of accounting and
financial data to improve market decision-making ahead of potential crises.

13 International Monetary Fund. Financial Organization and Operations of the IMF. Fifth
edition. Pamphlet Series No. 45. Washington, D.C. 1998. p. 63.

Beyond these general considerations, there is much disagreement over specific
courses of action. The Meltzer Commission argues that having the IMF “bailout”
countries experiencing large financial crises is a losing proposition. It has neither the
financial resources nor the clout to avert a currency run once begun, nor has its
conditionality requirements been effective in bringing about the structural reforms in
countries that many argue are needed to help avert future crises. The assurance of
IMF lending further exacerbates the problem by encouraging moral hazard,
considered the single most critical problem that can be solved in the public policy
process. Its fundamental stand hinges on the belief that reform must precede (if not
be held hostage to) IMF assistance, otherwise the cycle of excessive lending and
sudden withdrawal of capital will not be broken.
The Meltzer Commission believes the IMF should return to short-term liquidity
lending, where financial assistance can be disbursed quickly, unencumbered by
extensive conditionality requirements. This is why it strongly advocates countries
meeting preconditions for IMF eligibility. If reform has already proceeded to a certain
level, conditionality of IMF assistance is unnecessary. In cases where countries either
cannot or will not comply with IMF preconditions, they will eventually be subjected
to the unfettered actions of the international capital markets. Experience would
instruct policy makers as to which produces the least desirable outcome. As such, the
IMF would have a much reduced mission, eliminating all long-term assistance,
particularly for development purposes, and focus on very short (four months), but
quickly disbursed lending arrangements at “penalty rates.”
The Meltzer Commission dissenters agree with the need for structural reform of
developing country financial sectors, the preference for short-term IMF lending,
greater transparency, and the need for debt forgiveness for the poorest countries.
They argue, however, that the role of moral hazard is overplayed and that IMF
conditionality can reduce the magnitude of a crisis and is necessary to enforce reform
efforts. In this light, dissenters question the specific recommendations of the Meltzer
Commission report, particularly the strong stands on prequalifying for assistance,
reducing IMF policy leverage by eliminating conditionality, and lending at very short
maturities at above market (penalty) rates, which would potentially eliminate
assistance to some large countries, “increasing the risk of global economic disorder.”
These reservations have been reiterated by both the U.S. Treasury and the
Council on Foreign Relations. The Council report argues that developing countries
should adopt sound economic policies, but rather than make them a prequalifying
condition for IMF assistance, a graduated lending rate scale should be used to
encourage reform. The Council also supports the use of some type of capital control
to discourage over-reliance on short-term investment capital, which is the first to
leave if economic conditions deteriorate, hastening financial crises. Avoiding large
bailouts is possible by adhering to the IMF-imposed lending limits already in existence
and by relying more on market discipline to bring in greater private sector burden
sharing, while restraining IMF assistance if there is no good prospect for resolving a
country’s balance of payments problem.
The U.S. Treasury argues that changes are needed in the IMF to meet new
challenges of the global economy, but that the IMF is in the process of addressing
many of the concerns that have been raised by the Meltzer Commission. Treasury

asserts that the Commission’s specific recommendations, taken together, would deter
the IMF from doing its job, which would not further U.S. interests. It argues that
reform of the financial sector and other areas is critical, but that making it part of
preconditions for IMF eligibility would likely deepen and prolong financial crises for
countries not assisted. In its view, other avenues for encouraging reform are available
and IMF conditionality has been a necessary part of the process. Limiting loan
maturities to four months, when, for the average crisis, it has taken a minimum of
eight months to restore confidence in the private capital markets, indicates that the
Meltzer Commission suggestion is too restrictive. Treasury also argues that the
Poverty Reduction and Growth Facility (PRGF) has a constructive role to play in
assisting the development banks by offering IMF macroeconomic expertise.
The U.S. Treasury presents the IMF’s ongoing reform efforts as essentially
meeting most of the concerns raised by the Meltzer Commission report. Specifically
it points to: 1) transparency goals being met by the increasing number of IMF14
documents released to the public; 2) crisis prevention improving by the ongoing
implementation of the IMF’s Special Data Dissemination Standard (SDDS) and
adoption of the “preventative” Contingent Credit Line (CCL); 3) emphasis on
improving country financial standards to Basel Core Principles; 4) enhanced
government oversight of IMF resource use and other anti-corruption guidelines; and

5) continuing review of IMF operations in light of ongoing criticism.

These specific Treasury recommendations reflect the IMF’s perspective rather
closely and although the Fund has not addressed specifically the Meltzer Commission
suggestions, it has continued to respond to the international community’s critique of
its operations. The IMF has acknowledged the need to improve core areas of concern
raised by the various reports, including: transparency, accountability, unified
reporting standards, domestic financial systems, crisis prevention early warning
methods, clearly defined private sector involvement, and internally consistent
macroeconomic and exchange rate policies. It has responded with a detailed Code of
Good Practices on Transparency in Monetary and Financial Policies, which
incorporates guides such as the Special Data Dissemination Standard. The current
IMF Managing Director views this as a “work in progress,” however, entailing
adapting the Fund to the changing world economy rather than remaking it from
scratch and has not suggested reducing any of its current programs.15
Balancing Perspectives
Clearly, there are differences of opinion regarding the best path to achieve IMF
reform despite a general agreement that it should happen. There are also differences

14 See the IMF website at: [].
15 See: International Monetary Fund. Toward a More Focused IMF. Address by Horst
Kohler, May 30, 2000. Report of the Acting Managing Director to the International
Monetary and Financial Committee on Progress in Reforming the IMF and Strengthening
the Architecture of the International Financial System. April 12, 2000, and Supporting
Document to the code of Good Practices on Transparency in Monetary and Financial
Policies. July 24, 2000.

in how to bring about reform of developing country financial systems, despite
universal agreement that some level of minimally acceptable standards are needed and
that the IMF is unlikely to be successful at managing this on its own. The overall
question may become not whether the IMF should exist, but how it can best support
international financial stability along with a host of other official and private sector
In considering the merits of these reports,16 much can be learned from a historical
analysis of financial crises. Most retrospective discussions of the IMF begin with its
creation at Bretton Woods in 1944. Financial crises, both in the United States and
abroad, however, have a much longer history. One study points to the lessons from
past financial crises, comparing the troubled nineteenth and early twentieth century
period with the1990s. The author documents how the United States endured a
financial crisis on average every eight years before making sweeping changes to its
financial operations, such as creating the Federal Reserve System in 1913. Further
serious banking reform was delayed until after the Great Depression hit. This
experience points to the difficulty in making such deep structural reform that many
developing countries now face, which they often resist, as did the United States a
century ago, and the apparent serious level of motivation, both politically and17
economically, needed to spur such change.
Three insights emerge from this study. First, financial sector reform is not
needed for capital to return to a country that has undergone some type of financial
crisis. Financial capital, for various reasons, has repeatedly found its way back to
troubled countries, including the United States in the nineteenth century, despite
numerous setbacks. The need for financial sector reform, however, may be more
compelling because of this trend; that is, financial sector reform is necessary not
because capital will fail to return to crisis countries, but precisely because it will return
and hence be a disincentive for reform, setting the stage for the next crisis.18 This
supports the universal call for financial sector reform, but not necessarily the Meltzer
Commission’s implication that market discipline can force it.
Second, the IMF is not the cause of financial crises. Crises were a part of the
financial landscape long before Bretton Woods, when capital moved relatively freely
among countries and in similar volumes relative to the size of economies at the time,
and continued through history regardless of the international monetary system in
place. Whether the IMF has been an agent aggravating financial crises is less clear,
but this research suggests that solutions, such as closing the IMF, would appear to

16 There are other relatively recent responses to the Meltzer Commission, some of them
summarized in: Williamson, John. The Role of the IMF: A Guide to the Reports.
International Economics Policy Briefs No. 00-5. Institute of International Economics.
Washington, D.C. May 2000. Can be found at: []..
17 DeLong, J. Bradford. Financial Crises in the 1890s and the 1990s: Must History Repeat?
Brookings Papers on Economic Activity 2. Brainard, William C. and George L. Perry, eds.
Washington, D.C. 1999. pp. 267-69.
18 Ibid, p. 270.

have little effect on deterring future financial crises in and of themselves.19 There is
some evidence that international “bailouts” may have some effect on hastening
recovery in financially troubled countries, which can be thought of as a “benefit” to20
counter the “cost” of moral hazard. Still, there is broad preference to find a better,
more orderly, way to manage crisis situations.
Third, in comparing the exchange rate problems of the 1990s with those of a
century earlier (the gold standard), it has become clear that there are solid benefits
associated with firmly fixed exchange rates. Such fixing, however, requires a
commitment to policies that will support the exchange rate. In today’s world of
pegged exchange rates with less than credible promises given the proclivity of
governments to reverse policy when international pressures mount, it appears there
is little reason to believe that any of various alternatives to floating exchange rates or
some extreme form of fix (dollarization) is possible. This is in keeping with most
current exchange rate analyses.
In light of these insights, if there is a central conclusion that can be gleaned from
the varied approaches to IMF reform discussed in this report, it may be that it is too
much to ask the Fund to tame an international financial system where capital moves
freely and speculatively, capable of causing severe macroeconomic problems. The
Council on Foreign Relations idea that limited capital controls be reconsidered, for
example, may garner broader support in this context. This is not to deny the benefits
of increased oversight of the IMF, of continuing to emphasize adopting changes
already in progress at the IMF, or of more stringent Fund advocacy for improving
borrowing country policies. It may suggest, however, that because many players with
far more resources and clout than the IMF are involved (governments and financial
institutions), that reform of more than the IMF may be needed to improve the
prospect for greater stability to the international financial system.
In particular, there is a growing body of literature seeking to find a middle path
between continuing large IMF bailouts and leaving financially troubled countries to
be disciplined by panicked capital markets, both of which frequently result in turmoil.
One thrust argues for changing lending rules to include specific contractual
obligations that require creditors to pursue a collective orderly debt workout if a crisis
hits. This might diminish the frequency of future crises by incorporating a more
appropriate level of risk into lending arrangements and thereby reducing the amount

19 Ibid, p. 271. This point is reiterated and supported in comments on p. 286 and also in
Eichengreen, Toward A New International Financial Architecture, pp. 97-98.
20 Ibid, p. 273, f. 42. Based on a conversation with a top IMF official, the author cites the
case of Mexico in 1982, where the extent of international financial support was considerably
less (although unprecedented for the time) than that following the peso crisis in 1995. It is
argued that this distinction contributed to the fact that in 1982 there was a five-year lag before
capital returned, whereas in 1995, capital began returning within a year of the crisis peak.
Brazil, which in its 1999 crisis experienced a relatively short time before capital began
returning, might be a better example, given the large preemptive loan arrangement that was
negotiated, a case, interestingly enough, not evaluated by the Meltzer Commission. For details
on Brazil, see: CRS Report 98-987 E, Brazil’s Economic Reform and the Global Financial
Crisis, by J. F. Hornbeck. Updated June 19, 2000.

of capital flowing into developing countries. It could also lessen the depth of crises
by reducing the amount of capital that could leave the country at the IMF’s expense.
The IMF could serve as an active proponent of this approach through its consultation
and conditionality efforts, as well as, by lending into arrears as a support mechanism
for keeping all parties to the debt renegotiation table.21
It appears that oversight actions by the U.S. Congress and institutions
representing the international community have been critical in fostering the many
changes that are taking place within the IMF. Congress has its most leverage,
however, when considering appropriations legislation involving IMF funding
increases. Since the quota review occurs only once every five years and does not
always result in a recommendation for an increase, in the interim, Congress must rely
on the public forum and exerting policy pressure through U.S. representation at the
IMF as its primary options for making its voice heard. Continued oversight surely
will be necessary to keep the reform process moving, but more time may be needed
to sort out precisely which policy options will suit the collective, but competing needs
of the IMF member countries and other constituents of the global economy.

21 Council on Foreign Relations, Safeguarding Prosperity in A Global Financial System, pp.

69-72 and Eichengreen, Toward A New International Financial Architecture, pp. 65-78, 113,

and 121.

Appendix 1. Selected IMF Reform Proposals
Meltzer CommissionMeltzerU.S. TreasuryCouncil on
Issue Commission Response Foreign
Dissenting Relations
IMF Mission: 1) limitAgrees withAgrees withFocus IMF on
lending to short-termneed to reformneed tofiscal,
liquidity assistance; 2)IMF,differentiatemonetary,
distinguish from Worlddifferentiate itIMF fromexchange rate
Bank; no long-termfrom WorldWorld Banksurveillance
structural adjustment orBank, andand for betterand issues
development assistanceprovide betterdata(including loan
lending – close Povertydata. Does notdissemination,conditionality).
Reduction and Growthsupportenforced withUse smaller,
Facility (PRGF); 3)eliminatingstrongless frequent
collect and disseminatelonger-termsurveillance. “bailouts,”
country financial andlending, closingWould notemphasize
economic data on aPRGF, oreliminatequick reform
timely basis; 4)policy advicelonger-termafter crisis.
surveillance and advicereplacing IMFlending, thePRGF not
(not IMF conditionality)conditionality.PRGF, or IMFaddressed.
on economic policyconditionality.
through open Article IV
Participation in IMFSupportsSupports betterIMF should
Programs:1) membersimproved rulesstandards for allmake public
provide accurate andon informationcountryArticle IV
timely information forflow, disagreesreporting toconsultations
all market participants;with no lendingmarketand a
2) large industrialto largeparticipants via“standards
countries act as owndevelopedexpansion ofreport”
lenders of last resort,countries, doesIMF’s Specialassessing a
not eligible for IMFnot addressDatacountry’s
loans; 3) no requiredArticle IV,Disseminationcompliance
Article IV consultationsencouragesStandardwith
for developed countries;higher financial(SDDS), Articleinternational
4) minimum prudentialstandards, butIV reports, andfinancial
standards asnot asgreater use ofstandards (e.g.
preconditions forprecondition forliquiditySDDS and
automatic financialborrowing.indicators.Basel Core
assistance. Principles).

Meltzer CommissionMeltzerU.S. TreasuryCouncil on
Issue Commission Response Foreign
Dissenting Relations
Rules (preconditions)Does notDisagrees with No
for Lending: 1) allowaddress foreignpreconditionspreconditions,
entry of foreign financialbanks, supportsfor lending.use incentive
institutions; 2) requirestrongerSupportssystem
capital adequacy ofdomesticadvocating(variable
domestic institutions; 3)banking andfinancial sectorlending rates)
publish maturityBasel Corereform usingbased on
structure of sovereignPrincipals onIMFreforms that
and guaranteed debtcapitalconditionality. reduce
(including off-balanceadequacy, doesvulnerability to
sheet liabilities); 4) meetnot addresscrises (e.g.
“proper” fiscaldebt data,good bank
requirement.disagrees withdeposit
need forinsurance
specific fiscalsystem).
Terms of IMFDisagrees withDisagrees withNo huge
Lending: 1) 120-dayall provisions.all provisions. bailouts, use
loans with one rollover;Supports use ofexisting IMF

2) graduated penaltyexisting IMFlending limits,

rates; 3) explicit legalprogramsreform-based
priority for repaymentemphasizing agraduated
over other debt; 4)modified CCL*rates, special
clearly defined andfor crisis“contagion
observed credit limits; 5)prevention andfacility” to
defaulters denied accessgraduatedreplace
to credit from otherlending ratesCCL/SRF for
IFIs* and IMFwith SRF.*systemic crises.
Exchange Rate Policy:Suggests moreWould notRefuse
discourage use ofdetails neededsupport lendingassistance to
various peggedon howto countriescountries with
exchange rates in favordevelopingwithunsustainable
of firmly fixed or flexiblecountries canincongruentcurrency pegs.
exchange rate regimes.manage thisexchange rateSupports non-
issue. and discriminatory
macroeconomic short-term
policies. capital inflow

Meltzer CommissionMeltzerU.S. TreasuryCouncil on
Issue Commission Response Foreign
Dissenting Relations
Debt Workouts:A more detailedSupportsPrivate-sector
1) private sector mustformula ismarket-basedburden sharing
remain engaged in debtneeded fordebt workoutsdefined in loan
workouts to deterprivate sectorand increasedcontracts
resorting automaticallyinvolvement,debt relief(collective
to IMF assistance,agrees withthrough currentaction clauses),
lending preconditionsHIPC debtHIPC initiative,IMF relief for
and limiting IMFrelief.but not full debtdefault only if
response will help;forgiveness.“good faith”
2) HIPC debt forgivenrescheduling
with policy reform.talks are in
HIPC not
IMF OperationalSupports gist ofImprove IMFSupports IMF
Reform: 1) rationalizereform, doesgovernance andefforts on
and simply accountingnot addressaccountabilitytransparency.
system; 2) improvequota.with efforts toDoes not
transparency; 3) noestablish privateaddress IMF
further quota marketquota review
advisory groupprocess.
and permanent
office. No
change to quota
review process.
* IFI = International Financial Institution, CCL = Contingent Credit Line,
SRF = Supplemental Reserve Facility.