International Monetary Fund Obsolete

International Monetary Fund Obsolete

The Bank of England (BoE) says global economic evolution has rendered the International Monetary Fund (IMF) obsolete.  The IMF was created after World War II to rescue countries suffering from economic crises and now has 185 member countries.  But in a recent working paper, the BoE says the IMF’s framework is no longer adequate to bail out nations that are considered high-risk members.

The paper states that as IMF member countries have become more diverse, the institution has become less able to address their needs.  The IMF highlights this problem in a recent report of its own, but says it is looking for ways to strengthen its framework.

Our view

It is interesting when things start to become difficult that the Bank of England raises concerns.  The reality is that the IMF is perhaps not adequate as smaller nations now have much greater economies but what is the alternative? We await constructive suggestions.

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