A Reform Proposal for a Fit-For-Purpose International Monetary Fund

The International Monetary Fund (IMF) is a pillar of the international monetary system, providing multilateral surveillance of countries’ economic and financial policies. It also provides short-term funding for countries facing macroeconomic and/ or balance of payment stresses. As the needs for its surveillance and lending activities increase, the IMF has become less able to meet those needs. The governance structure of the institution no longer reflects current economic realities and its financial resources have become increasingly inadequate. These problems are distinct but inter- related and together hinder the IMF’s efficiency. A post-COVID-19 global financial system that is fit-for-purpose should envision substantially reforming the IMF’s governance structure and bolstering its lending capacity to levels commensurate with the increase in complexity of the financial system and the size of the global economy. This Policy Brief proposes solutions for improving the IMF’s governance structure, increasing the resource base, and using those resources more efficiently.