Reforms of the IMF in the Context of the Global Financial Crisis

Abstract

The IMF during its existence has undergone numerous changes. From the institution established for international monetary cooperation and oversight over fixed exchange rate regimes, the IMF has turned into an institution whose main goal is the maintenance of the global economic and financial stability. In order to achieve this goal, the IMF in the modern era focuses its activities primarily on the prevention of emergence of economic crisis and minimising of their negative effects. However, at the end of the XX and the beginning of the XXI century, due to inefficient activities and poor results, especially when it comes to solving the crisis in South East Asia and Argentina, the Fund began to lose its credibility and found itself in a deep crisis. The IMF has tried to take steps that would lead to the improvement of the situation, but it did not manage to achieve tangible progress. The global economic crisis has further highlighted the existing drawbacks and omissions, which the Fund has been faced with. However, the growing demand for financial support from member states, as well as the need for the organization that would succeed in preventing the emerging of crisis and facilitate the fight with its consequences, were providing serious support to the Fund. The IMF's new effort has been focused on reforming its structure and the way of functioning.

This paper analyzes the progress achieved by the IMF in the implementation of reforms related to resolving the difficulties caused by the crisis and discusses possible directions for future activities of the Fund including an overview of vulnerabilities and the possibility of their elimination.