IMF in the International Monetary System －Globalization and Fragmentation－

Although the International Monetary Fund (IMF) played a central role in the international monetary system in the post-World War II Bretton Woods System, it has been forced to adapt to changes in the environment, including in particular the emergence of multiple international currencies and a globalized financial system. The direct role of the IMF in the international monetary system became more limited to that of providing emergency assistance. In response, the IMF is branching outside its traditional focus on macroeconomic and exchange rate policies, including to that of an aid agency. The main tools with which the IMF now exercises its influence are its analysis and policy recommendations, but for these to have an impact, the IMF needs to have adequate expertise as well as broad trust and support. The financial system now presents an important source of risk to the international monetary system, but it is not evident that the IMF has sufficient expertise in this area. Moreover, the international political situation cast shadows over the maintenance of widespread support for the IMF. When looking ahead to the future of the international monetary system, there are risks of fragmentation brought about by factors such as financial technology and international politics. The IMF faces significant challenges as a global institution in maintaining its role as a forum for collaboration in the international monetary system, not least through strengthening its ability to exercise intellectual leadership and enhancing solidarity.