Strengthening the International Monetary Fund for Stability and Sustainable Development

A decade after the Global Financial Crisis, the world economy continues to be on fragile footing. While global growth is gradually recovering in many parts of the world, deep vulnerabilities remain in the global monetary and financial system at a period when support for multilateral institutions is very low in some countries. During these times, the International Monetary Fund (IMF) lacks the resources and governance capacity to effectively play its role in preventing and mitigating financial instability. 

This policy brief by Haihong Gao and Kevin P. Gallagher calls on Group of 20 (G20) leaders to reaffirm that the IMF is a central pillar in a well-functioning multilateral system striving to achieve peace, stability and the Sustainable Development Goals (SDGs). 

Key Proposals:

• Reaffirm that the IMF is an important pillar of the multilateral system.
• Scale the IMF’s capacity to prevent and mitigate financial instability and meet the needs of member countries.
• Reform IMF governance to reflect 21st century realities.
• Expand and improve the IMF toolkit for stability and growth.
• Advance surveillance and advice on capital account liberalization and the use of capital flow management measures.
• Improve surveillance, data and advice on debt sustainability.
• Boost the level of access for liquidity support and address the absence of a precautionary instrument for low income countries.  
• Align conditionality policies with the SDGs.
• Cooperate with other actors in the Global Financial Safety Net.