{
  "id": "RL30635",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL30635",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 104491,
      "date": "2001-01-05",
      "retrieved": "2016-05-24T20:30:47.107941",
      "title": "IMF Reform and the International Financial Institutions Advisory Commission",
      "summary": "In the fall of 1998, financial crises in Asia, Russia, and Brazil were unfolding, though in different\nstages, as the 105th Congress was in the process of passing the Omnibus Consolidated and\nEmergency Supplemental Appropriations Act for FY1999 ( H.R. 4328 ,  P.L. 105-277 ). \nThis legislation increased the U.S. quota of the International Monetary Fund (IMF), but attached a\nnumber of conditions to dispersal of the funds. Among them was creation of the International\nFinancial Institutions Advisory Commission (the Meltzer Commission), which Congress chartered\nto evaluate and recommend future U.S. policy toward the global financial institutions, particularly\nthe IMF.\n  The Commission released its report on March 8, 2000, calling for changes in the mission and\noperations of the IMF and the development banks. The 11 commissioners were unanimous\n only  in\ngenerally recommending that: 1) the IMF restrict its lending to short-term liquidity needs, and 2) that\nit forgive debt to the poorest developing countries. The report makes the case for restructuring the\nIMF to reduce and define clearly its mission, and clarify obligations for members of the Fund, as\nwell. At the heart of the proposal is a strong conviction that deep structural reforms, particularly of\ndeveloping country financial systems, would go a long way toward reducing the potential for\ncurrency crises and the related need for large, costly IMF bailouts. It also focuses heavily on the role\nof moral hazard. These concerns led to specific policy prescriptions, not unanimously embraced,\nincluding requiring financial sector reforms as a precondition for IMF assistance, lending for no\nlonger than 120 days (with one rollover period) and at \"penalty\" rates, and eliminating any long-term\nlending for structural adjustment or poverty reduction.\n  Four members of the Meltzer Commission dissented from the report. They supported the call\nto differentiate clearly the responsibilities of the IMF and development banks, the need for stricter\nbanking systems in developing countries, greater transparency to mitigate abuse by all parties, and\ndebt forgiveness for the poorest countries. They disagreed with the details listed above, arguing that\nthey would conceivably worsen rather than improve the prospect for global financial stability and\nthereby undermine the fight against poverty and slow development.\n  A number of respondents to the Commission report also disagreed with what some consider its\n\"narrow\" prescriptions, including the U.S. Treasury and the Council on Foreign Relations, which\noffer alternative reform programs. In addition, financial crises have been a part of the international\neconomic landscape long before the IMF was established, suggesting that too much emphasis on this\none institution may not bring the desired stability to the international financial system. Still, the IMF\nis responsible for addressing the concerns raised by Congress and other government institutions\naround the world, which have served as a critical impetus for change. Continued oversight will be\nnecessary to keep the reform process moving and more time may be needed to sort out precisely\nwhich policy options will suit the collective, but competing, needs of IMF member countries and the\nbroader participants of the global economy.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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      "topics": []
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  ],
  "topics": [
    "Appropriations",
    "Economic Policy"
  ]
}