G20 ‘deeply disappointed’ on continued delay in IMF reforms

the grouping has kept up the pressure on the US that has held up governance reforms

By: Reuters | Washington | Updated: April 12, 2014 1:42 am

The world’s top economies are monitoring the economic situation in Ukraine for any fallout that may pose risks to economic and financial stability, the Group of 20 finance ministers and central bankers said on Friday in a final communique.

G20 officials also kept up the pressure on the United States, which has held up IMF reforms agreed in 2010 that would double the Fund’s resources and give more say to emerging markets.

The G20 said it was “deeply disappointed” in the delays and will work with the IMF on options on how to advance the reforms if the United States did not move forward by year-end. The long-delayed IMF reforms would amplify the voices of emerging-market countries such as the BRICS – Brazil, Russia, India, China and South Africa. In the communique, the G20 said it is “deeply disappointed with the continued delay in progressing the IMF quota and governance reforms.”

While the final communique was less specific on some key points than the one the G20 issued in February, including on the spillover effects of monetary policies in advanced nations, a G20 source downplayed those changes as stylistic and not substantive.

If the reforms are not ratified by year-end, the G20 said, “We will call on the IMF to build on its existing work and develop options for next steps and will work with the (IMF’s policy committee) to schedule a discussion of these options.”

A source said Brazil had pushed for a harder line on how the G20 should respond to the delays in IMF reform.

Earlier on Friday, Russia’s finance minister said developing nations may demand changes to the IMF’s emergency borrowing mechanism if the United States does not approve the 2010 governance overhaul for the global lender.

In the section of the communique that appeared to address the effects that policies by US Federal Reserve and other major central banks have on the rest of the world, the G20 pledged to provide “clear and timely communication” of its actions, with an eye on the global fallout as policies are “recalibrated.” It did not specifically name monetary policy, and dropped a reference from the G20’s February communique that stressed central banks should be careful in withdrawing stimulus.

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