1 Introduction
1. On 13 December 2005, we announced the start of
an inquiry into the International Monetary Fund (IMF), and its
role in globalisation. After requesting written evidence, we held
three oral evidence sessions. The first, in January 2006, was
with non-governmental organisations (NGOs) and selected academic
experts; the second, in April 2006, with the Governor of the Bank
of England, Mervyn King; and the final session in May 2006 was
with the Chancellor of the Exchequer, the Rt Hon. Gordon Brown.
We also undertook a visit to the United States in February 2006,
in the course of which we met both representatives of the World
Bank, including President Wolfowitz of the World Bank, and representatives
of the IMF, including Ms Anne Krueger, first deputy Managing Director
of the IMF. We are grateful to all those who gave evidence or
otherwise assisted with our inquiry, especially those we met on
our visit to the United States.
2. This is a time of change for the International
Monetary Fund (IMF). Since its foundation as one of the 1940s
Bretton Woods institutions, the Fund has seen enormous growth
in the world economy. The organisation of the world economy has
also changed, from an era of almost global fixed exchange rates,
to one where most major industrialised countries now float their
exchange rates. Changes in technology and communications have
given rise to a perceived increase in 'globalising' trends. The
IMF sits as the central institution of the international financial
system, and therefore at the heart of the world economy.
3. In the light of this, our inquiry has proved to
be extremely timely. After our evidence session with experts and
NGOs, the Spring meetings of the IMF occurred. Afterwards, in
our next evidence session, the Governor of the Bank of England
remarked to the Committee that he thought "the events last
weekend [at the Spring meetings] were a very significant departure
from earlier versions of the strategic review and the energy which
the Fund was demonstrating".[1]
They also marked a change in the outlined position of the Fund,
as it begins its own process of reform to make itself more relevant
to the environment in which it finds itself. The IMF published
'The Managing Director's Report on Implementing the Fund's Medium-Term
Strategy' in April 2006, which superseded the original document
on which the inquiry had been taking evidence, 'The Managing Director's
report on the Fund's medium-term strategy'. As well as this, the
International Monetary and Financial Committee (IMFC) produced
a communiqué which also aimed to address policy recommendations
for the IMF going forward. At the conclusion of the IMFC meeting,
the Chancellor of the Exchequer referred to the upcoming annual
meeting of the IMF in Singapore as a "reform summit".[2]
Our report therefore comes at a time when the UK Government has
an excellent opportunity in which to mould the debate on the IMF's
future.
4. Our report deals first with defining a purpose
for the Fund and, with this purpose in mind, we deal in turn with
the governance of the Fund, its surveillance and analysis functions,
its lending, its finances and the UK Government report on its
dealings with the IMF. We conclude with the overall findings of
our work.
1 Q 90 Back
2
Transcript of a Press Conference by the Chancellor of the Exchequer
and others, International Monetary Fund, Washington, D.C., 22
April 2006, www.imf.org Back
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