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The International Monetary Fund and its Role as a Guarantor of Global Financial Stability

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  • Sonsoles Gallego
  • Pilar L´Hotellerie-Fallois
  • Fernando López-Vicente

Abstract

Given the growing real and financial integration of economies worldwide, there is a need for the presence of supranational mechanisms to address crisis situations. The International Monetary Fund (IMF) is the multilateral institution at the core of the global financial safety net (GFSN). The swift development of other elements of this net since the last global financial crisis, such as the regional financing arrangements, has made the system sounder but also poses fresh challenges. The broad membership of the IMF, the volume of its resources and its accumulated global experience in crisis management make the organisation key to shoring up global monetary and financial stability. However, the IMF is subject to recurrent discussions about its governance and lending policies, including the size and composition of its resources, and the distribution of power within the organisation. The IMF is currently immersed in the Fifteenth General Review of Quotas. The backdrop to this negotiation is the risk that, in the absence of a satisfactory agreement on the size and distribution of its resources, the IMF’s financial sufficiency and its degree of representativeness among its members may be diminished in the coming years. This might significantly undermine the stabilising capacity of the GFSN.

Suggested Citation

  • Sonsoles Gallego & Pilar L´Hotellerie-Fallois & Fernando López-Vicente, 2018. "The International Monetary Fund and its Role as a Guarantor of Global Financial Stability," Economic Bulletin, Banco de España, issue DEC.
    • Handle: RePEc:bde:journl:y:2018:i:12:d:aa:n:33
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    References listed on IDEAS

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    1. repec:bde:journl:v:01:y:2014:p:01 is not listed on IDEAS
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    8. Atish Ghosh & Manuela Goretti & Bikas Joshi & Alun Thomas & Juan Zalduendo, 2008. "Modeling Aggregate Use of IMF Resources—Analytical Approaches and Medium-Term Projections," IMF Staff Papers, Palgrave Macmillan, vol. 55(1), pages 1-49, April.
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    Cited by:

    1. Enrique Esteban García-Escudero & Elisa J. Sánchez Pérez, 2020. "Los swaps de divisas entre bancos centrales," Occasional Papers 2025, Banco de España.
    2. Isabel Garrido & Xavier Serra & Sonsoles Gallego, 2021. "The IMF´s resources in the face of COVID-19 crisis," Economic Bulletin, Banco de España, issue 3/2021.
    3. Enrique Esteban García-Escudero & Elisa J. Sánchez Pérez, 2020. "Central bank currency swap lines," Occasional Papers 2025, Banco de España.

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    More about this item

    Keywords

    IMF; Global Financial Safety Net; Review of Quotas; systemic crises;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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