A new council of politicians, modeled on the newly-powerful
G20 group of rich and developing economies, should run the IMF,
a leading expert on the Fund has told Emerging
Stanley Fischer, governor of the Bank of Israel and a former
IMF first deputy managing director of the IMF, said the G20 and
Fund boards could converge as part of a wider
The council would replace both the IMF executive board, made
up of full time officials, and the International Monetary and
Financial Committee (IMFC), which is made up of ministers but
only has an advisory role.
Fischers views will carry weight, as he is a co-author
of a report on IMF reform that will be published tomorrow by
the Group of 30, an international body of financiers and
The idea of an IMF Council was also given strong support by
the so-called Committee of Important Persons, chaired by South
African planning minister Trevor Manuel, that was commissioned
by the fund to look at options for IMF reform.
In an interview ahead of the Annual Meetings, Fischer said
the Fund was hampered by the attitude of some members that it
was a body over which they did not have real influence.
When you ask countries why they prefer to operate in
groups or in Gs rather than through the board of the IMF, they
complain about the bureaucracy and the influence of the
staff, he said.
Well, if its the IMF council, they can run their
meetings as they want and they can make them less formal if
they want. So it is not a matter of here is the Fund and
it decides, because it is not the Fund that would decide
if the G20, or something close to it, became the council of the
Fischer said that the composition of the G20 and the
IMFs executive board were similar. Somewhere down
the road the G20 and the board need to converge and the
membership of the G20 and the board need to converge. You
dont need two separate bodies.
He acknowledged that this would fuel the debate about the
allocation of seats. The US wants to see the board cut from 24
to 20 seats, with Europe losing most of the seven seats it
There will be a real issue of how many European
countries are in it, because the G20 has expanded to add a few
European countries, which is not what not one had thought was
missing from the current board of the IMF, he said.
European countries such as France, Germany and the UK, which
have permanent seats on the board, are resisting calls to
shrink their share. British Chancellor of the Exchequer
Alistair Darling told Emerging Markets: There is
the principle that there is no taxation without
We are a substantial donor and so are some other
countries, and we feel quite strongly that we need to be
represented too. There has to be a rebalancing, but we need to
Guillermo Ortiz, the governor of the Mexican central bank
and a co-author of the Group of 30 report, told Emerging
Markets he wanted the IMF to be seen as legitimate and
authoritative. The centre of gravity in the world has
changed and the structures of governance and governability in
the fund must also change.