The United States (US) Senate has ratified reforms in the International Monetary Fund (IMF) to boost the representation of emerging economies as part of a budget bill.
The reforms ratified in the legislation are in line with the proposed 2010 Quota Reforms and now it will go to President Barack Obama for assent.
These proposed reforms are the biggest change in the governance of the Fund since it was established after World War Two in 1945 after the Bretton Woods Conference.
Proposed reforms in the Bill
Put four emerging markets Brazil, China, India and Russia among the IMF’s top 10 shareholders and give emerging markets more influence at the global lender.
Gives emerging markets more voting power and double the Fund’s resources. China’s vote at the IMF would increase to 6 per cent from 3.8 per cent.
It would make it the third-largest shareholder from its previous sixth position. The voting power and quota shares of the IMF’s poorest member countries will be protected.
IMF’s Board will entirely consist of elected Executive Directors. It will end the current category of appointment of Executive Directors by five largest quotas holders.
Quotas of all 188 members will increase as the Fund’s quota resources rise to about 477 billion special drawing rights (SDR) from 238.5 billion.
Current Affairs: 21st December, 2015 Important Days in November and December Current Affairs bullet points Round up 7th to 14th December, 2015 Current Affairs Round up November, 2015.
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