Chapter 15: A new global financial order?
Aims of the exercise
- To gain an inside view of the IMF’s activities from its Managing Director
- To critically assess the IMF’s role in global financial regulation
- To consider the proposed reforms of the IMF in the light of the current global financial situation
Getting started
Go to the IMF website at
www.imf.org. Here, click on the topic, ‘What the IMF does’. On this page, click on ‘Emerging markets’. Here there are a number of feature items. Click on the one entitled, ‘World faces deepening crisis, IMF chief warns’, of 21 January 2009. This is an article based on an interview with the Managing Director, Dominque Strauss-Kahn, by the BBC.
Tasks
A. Questions
Having read the article, answer the following questions:
- What are the aspects of the IMF’s role in global governance which are apparent from this article?
- In his recommendations for financial recovery, which elements are for governments and which are matters in which the IMF has a key role? In what ways can they work together?
In the section, ‘Stimulus key to recovery’, click on the link ‘has recommended’, which takes you to a speech delivered by the Managing Director, on ‘The IMF and its future’, delivered on the 15th December 2008. Read the speech and answer the following questions:
- How does he see the IMF’s role in the ‘new financial architecture’?
- Assess the importance of the role of identifying and giving warnings of impending financial problems. He seems to view the IMF’s role as becoming more proactive in this function. Do you agree with him, and why?
- What is the role of the G-20 process in global governance?
B. Reflection
- In what respects have you gained a fuller picture of the role of the IMF? ?
- To what extent is the Managing Director responding to criticisms of the IMF and acknowledging the need for reform of its structures and processes?
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