developing countries: IMF should also monitor advanced economies

Times of India
20 Oct 2007

" ... WASHINGTON: The International Monetary Fund should step up its surveillance of the United States and other advanced economies in light of the global credit crisis shaking world markets, the Group of 24 developing countries said on Friday.

They also repeated their demand for greater representation of developing countries in the governing bodies of the IMF and its sister organisation, the World Bank, to adapt institutions created 63 years ago to the conditions of the 21st Century.

In their communique the finance ministers and central bankers in the Group of 24 "noted the vulnerability of the US subprime mortgage market and its financial and spillover effects" on the global economy.

The meltdown in the United States caused by risky subprime mortgages made to borrowers with spotty credit or low income also hurt investors in Europe and elsewhere. Banks, hedge funds and others that invested in subprime mortgage-backed securities suffered big losses.

The ministers said that the crisis "underscored the need to improve the fund's surveillance of the advanced economies putting as much focus in evaluating their vulnerabilities as it does in emerging market economies."

The G-24 ministers met on the sidelines of the annual meetings of the IMF and World Bank. Established in 1971 to coordinate developing countries' positions on international financial and developmental issues, the G-24 includes nations from Asia, Africa and Latin America, including growing economic powers such as India and Brazil. China sits in on the meetings as an observer. ... "   Read full article >>