The International Monetary Fund (IMF) wants new authority to supervise the global financial system, Dominique Strauss-Kahn said.
“We must build on this positive momentum to transform the Fund into an institution even better equipped to meet the challenges of the post-crisis era,” Strauss-Kahn told a meeting of the Bretton Woods Committee.
He called for the Fund to improve its tools for financial surveillance and to “construct a global risk map” of nascent systemic risks. And while noting that the Federal Reserve and other central banks provided liquidity swaps during the worst of the crisis, Strauss-Kahn said that the IMF should explore options like short-term credit lines for extending emergency lending in future crises.
So do you think it would work to have the IMF as a global financial policeman? It makes sense from the point of view that they are the ones that need to bail out governments in trouble.
But can they actually prevent another global crisis? Or do you have other ideas of how we can best construct a global authority to prevent the kind of recessions we just had?
Can a global policeman actually prevent downturns from happening? Or just make a recession less severe? Do you believe a global authority is a good idea? Or should we just, as the financial industry wants, leave it to the markets?
(Photo Flickr – International Monetary Fund)