A Crisis of Confidence? Reestablishing the Legitimacy of the IMF and the Global Financial Safety Net

The Global Financial Safety Net (GFSN), or the set of institutions that are designed to provide liquidity and mitigate impacts of financial crises, is unequal and largely inaccessible for lower-income countries. In particular, the International Monetary Fund (IMF), the anchor of the GFSN, is facing a crisis of legitimacy as it undergoes its 16th General Review of Quotas, which is intended to realign the Fund’s governance structure with the realities of the current global economy.

Yet, following the 2023 IMF/World Bank Group Annual Meetings in Morocco, it appears that little to no progress will be made during this quota review cycle. While the IMF may increase its firepower with an ‘equiproportional’ increase of quotas across all member countries, doing so risks perpetuating the inequalities in IMF governance that leaves emerging market and developing economies (EMDEs) underrepresented in the decision-making process.

What is the current landscape of the GFSN, and where are its shortcomings? What is needed to rebalance the GFSN and ensure accessibility for countries of all income groups? If the 16th General Review of Quotas doesn’t deliver realignment at the IMF, what can be done ahead of the 17th Review in 2028?

A new update to the Global Financial Safety Net Tracker, co-produced by the Boston University Global Development Policy Center, Freie Universität Berlin and the United Nations Conference on Trade and Development, provides key insights on the current state of the GFSN, lending capacity and more.

On Tuesday, December 12, 10:00-11:00AM EST | 16:00-17:00 CET, join us for a webinar discussion on the IMF quota reform, the Global Financial Safety Net Tracker and building a fit-for-purpose financial system.

Speakers:

- Marilou Uy, Non-resident Senior Fellow, Boston University Global Development Policy Center

- Barbara Fritz, Professor, Freie Universität Berlin

- Marina Zucker-Marques, Post-doctoral Researcher, SOAS, University of London

- William N. Kring (Moderator), Executive Director, Boston University Global Development Policy Center