World’s Financial Leaders to Meet in Washington

Moving to update the international financial system and draw lessons from Asia’s financial firestorm, the world’s money managers will assemble in Washington this week to consider ways to protect global economic order.

Finance ministers, central bankers and businesspeople from 180 nations will attend the spring meetings of the World Bank, the financier of global development, and the International Monetary Fund, the watchdog of countries’ finances.

The IMF-World Bank meetings will coincide with a semiannual meeting of finance ministers and central bankers of the Group of Seven leading industrial nations, who will also be grappling with questions about the IMF’s role in the world economy.

G-7, IMF and World Bank officials are expected to review what went wrong with their responses to the Asian financial crisis and discuss how to better anticipate and prepare for future crises.

The IMF and World Bank, established in 1944, are facing mounting criticism for failing to foresee the Asian crisis.

Critics in the U.S. and elsewhere say they want an explanation of why governments must continue to pay dues to the IMF, the international lender of last resort and a secretive organization they say failed to prove its worth in the Asian crisis.

On Capitol Hill, the Republican-led Congress is weighing a Clinton administration request for $18 billion to boost the IMF’s coffers, depleted by multibillion-dollar bailouts in Asia.

Treasury Secretary Robert Rubin said he wants officials to mull over how the international financial system can modernize and change the way it does business in order to respond more quickly to monetary crises.

The first task of finance ministers on Tuesday will be to focus on what caused the collapse in Thailand, Indonesia and South Korea last summer, which eventually prompted IMF aid packages totaling $114 billion.

The IMF and many analysts say it was a combination of economic mismanagement by countries and panic by institutional investors who pulled money out when currencies started to fall.