The role of the IMF
During the meeting held in South Korea and attended by ministers of finance of the G-20 courtiers'the bickering fight on currency that has been ensuing amongst nations was acknowledged for its detrimental effect on world economics. It was agreed during the meeting that the right body to play an effective role as arbitrator would be the International Monetary Fund body.
The International Monetary Fund as a body has now been selected to monitor the financial games being played by each country and call foul when any particular move is not laid down per canons. The International Monetary Fund is aware of the limitations and the magnitude of the task that this limited body has been given. It definitely is a serious issue and goes beyond matters such as deciding on bad credit credit cards policies. This fact has even been acknowledged by its own director Dominique Strauss-Kahn. He also demanded an increase in the mandate to be effective in the real sense as a monitoring agency at the end of the G-20 meeting of finance ministers.
To pump in greater funds and resources into the IMF that would determine how much each country contributed and could borrow from the institution was one resolution that was passed to strengthen the body. Removing some voting rights from the financially powerful nations was another resolution that was passed. This would allow developing markets to have a larger say in this financially emerging scenario.
Some of the largest shareholders of the fund would be China, Russia, India and Brazil. However, there is the US of A which would retain its major voting power with 17 percent as the rule position is 85 percent required for a mandate to be passed.
How much these powers would enable the body to play its role effectively is yet to be seen and financial advisers are not so sure about this whole issue.
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