IMF to Boost Monitoring to Head Off Currency Crises

Global finance officials agreed to establish an early-warning system to detect Mexican-style currency crises, but they failed to resolve disputes over expanding the resources of the International Monetary Fund.

The spring meetings of the 179-nation IMF and its sister lending organization, the World Bank, concluded Thursday after delegates approved an overhaul of how the IMF conducts surveillance activities.

The proposals will require increased monitoring of countries deemed to represent the greatest threat to the global economic system, as well as expanded requirements on the types of financial information that nations will be asked to provide the IMF and financial markets.

Private economists generally praised the package of reforms approved by the IMF’s policy-setting interim committee, although some expressed disappointment that the IMF was not able to resolve disputes over various proposals to boost resources to respond to future economic crises.

“The IMF is moving in exactly the right direction,” said Robert Hormats, a vice president of Goldman Sachs in New York. “It doesn’t guarantee that there won’t be future problems, but more surveillance and more information available to the markets will reduce the risk of surprises and shocks.”

The package of proposals was adopted after the IMF and the Clinton Administration came under criticism for their handling of the Mexican situation.