With the global economy still in somewhat of a crisis and all the events in Japan impacting world finances too, it might be understandable if one were to inquire about the current position of the International Monetary Fund (IMF) today. Of course though, when it comes to such large monetary issues, where there are two people there has to be at least three opinions. A meeting held on how to make reforms to the world’s monetary system was attended by representatives from the top 20 economies.
Pleasant as everyone probably was to each other at the meeting which was held in Nanjing, China, the opinions on exactly how to actuate this change were incredibly different with China asking for a very gradual approach; France pushing for extreme change through the country’s president “ambitious agenda” presentation and America just wondering what all the fuss was about believing that it wouldn’t be too hard to make such a change.
Improving International Currency Order
The other issue on the table was how to “improve the international currency order so that it can provide a more solid foundation for the global economy.” It was proposed that a timetable should be set out for currencies like the Chinese yuan (which are emerging) to move into the IMF’s Special Drawing Right (SDR) “in recognition of their growing role in the world economy.” But America wasn’t so sure. The US executives in attendance didn’t really believe this “international effort” would be needed to fix the issues in the world’s monetary system. It actually seemed instead – according to Timothy Geithner (the country’s Treasury Secretary) that the biggest problem to contend with was the exchange rate policies inconsistencies but that even that issue wasn’t so big and complex and, in his opinion, wouldn’t need a “new treaty or institution,” but rather be solved by “national actions.”
So only time will tell what action – or lack thereof – will be taken vis-à-vis the IMF and the global economy today. Whether it will ultimately decide to act along the lines of Cautious China, Fearless France or the Uncomplicated United States of America remains to be seen.