Chapter 2: The IMF and the challenge of relevance in the international financial architecture
2. The IMF and the challenge of relevance in the international ﬁnancial architecture Martin Parkinson and Adam McKissack1 INTRODUCTION The end of the 20th century, and beginning of the 21st, has proven to be something of a watershed period for the International Monetary Fund (IMF). The string of major crises of the past decade, and the associated reassessment of how to maintain international ﬁnancial stability, saw signiﬁcant questioning of the role of the Fund.2 The resulting soul searching – and the acknowledgment by the Fund and its shareholders of the need for change – has led to a substantial refocusing of its activities onto its core responsibilities in the last ﬁve years. This change has not been without pain, but more change is needed still. The IMF must continue to evolve as the world changes, in order to retain its relevance to the international ﬁnancial system. But its evolution must be around its core responsibilities. It must avoid having its focus fragmented by straying into areas better dealt with by other parts of the international ﬁnancial architecture. This need for further change provides an opportune time to reconsider the evolution of the IMF’s role since it was established in the 1940s and to ponder some of the challenges ahead. Despite criticism, the Fund retains a central role in today’s international ﬁnancial architecture, suggesting that the evolution to date has been broadly viewed as successful. However, the choices it makes now in response to pressures for further change will help determine whether...
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