Peterson Institute for International Economics

Congress Should Support the IMF

C. Randall Henning argues that a measure to increase the US commitment to the International Monetary Fund, approved by the Senate but not by the House, is needed to stabilize emerging-market economies.

Recorded May 22, 2009. © Peterson Institute for International Economics.

Steve Weisman: This is Steve Weisman at the Peterson Institute for International Economics. Our guest, Randall Henning, senior fellow at the Institute, is going to walk us through a complex but very important topic today: the International Monetary Fund. Randy is also a professor of international economic relations at American University. Thanks for joining us, Randy.

C. Randall Henning: Thank you, Steve. I’m glad to be with you again.

Steve Weisman: This conversation is taking place on the eve of Memorial Day weekend, and Congress has acted or begun to act on an Obama administration request to supply funding for the International Monetary Fund. Let’s talk first about the context. The global financial crisis is still in full roar and the International Monetary Fund has become a centerpiece of the solution that’s going to get us out of the crisis, in the view of the Obama administration. Tell me why they think that’s true.

C. Randall Henning: You’re right that the crisis continues. Several countries continue to come to the International Monetary Fund for financing. I’m expecting that the growth in Europe will continue to be slow, the recovery will be lagged. So those countries in Central and Eastern Europe that have suffered may continue to be candidates for Fund financing. Even though many of us have seen green shoots of recovery, that doesn’t mean that we’re out of the woods yet, and the Fund remains an essential part of the overall strategy for that reason.

Steve Weisman: Roughly how many countries have needed to turn to the Fund since the crisis began and what sort of reasons compelled them to do that?

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Originally published at the Peterson Institute for International Economics.© 2009 Peterson Institute for International Economics. all rights reserved.

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