The International Monetary Fund and its Role as a Guarantor of Global Financial Stability

16 Pages Posted: 20 Dec 2018

Date Written: December 20, 2018

Abstract

Given the growing real and financial integration of economies worldwide, there is a need for the presence of supranational mechanisms to address crisis situations. The International Monetary Fund (IMF) is the multilateral institution at the core of the global financial safety net (GFSN). The swift development of other elements of this net since the last global financial crisis, such as the regional financing arrangements, has made the system sounder but also poses fresh challenges. The broad membership of the IMF, the volume of its resources and its accumulated global experience in crisis management make the organisation key to shoring up global monetary and financial stability. However, the IMF is subject to recurrent discussions about its governance and lending policies, including the size and composition of its resources, and the distribution of power within the organisation. The IMF is currently immersed in the Fifteenth General Review of Quotas. The backdrop to this negotiation is the risk that, in the absence of a satisfactory agreement on the size and distribution of its resources, the IMF’s financial sufficiency and its degree of representativeness among its members may be diminished in the coming years. This might significantly undermine the stabilising capacity of the GFSN.

Keywords: IMF, Global Financial Safety Net, Review of Quotas, systemic crises.

JEL Classification: F3, F32, F38, F42, F65, G28

Suggested Citation

Gallego Herrero, Sonsoles and L´Hotellerie-Fallois, Pilar and López Vicente, Fernando, The International Monetary Fund and its Role as a Guarantor of Global Financial Stability (December 20, 2018). Banco de Espana Article 23/18. Available at SSRN: https://ssrn.com/abstract=3304551 or http://dx.doi.org/10.2139/ssrn.3304551

Sonsoles Gallego Herrero (Contact Author)

Banco de España ( email )

Madrid 28014
Spain

Pilar L´Hotellerie-Fallois

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Fernando López Vicente

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

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