Muted response to call for IMF reform
Mervyn King, governor of the Bank of England, has warned that the International Monetary Fund would become an obscure organization unless it was reformed.

King's analysis is that the IMF should look closely at its role — specifically its focus, independence and legitimacy. This comes after finance ministers and central bankers from the Group of Seven countries examined the role of the IMF and its sister organization the World Bank cursorily. It has been left to Rodrigo Rato, the IMF's managing director and a former finance minister of Spain to attempt to build consensus around incremental reforms.

King's conclusions are much more radical than most of the statements from finance ministers and other international financial diplomats. He argued that in a world of floating exchange — in which private capital flows are much bigger than IMF's resources, and when Asian countries have insured themselves against future financial market disturbances by building huge foreign exchange reserves — it was time to recognise that the fund's role as an international lender of last resort has become diminished.

Instead, he said, the role of the IMF should be as a provider of rigorous and independent analysis of countries' national balance sheets, highlighting where risks to the international financial system lay.

But Europe has shown no interest in a discussion on IMF.

Even though there is recognition of the need for reform to increase Asia's representation, there has been no indication that European finance ministries and national central banks are willing to reduce their perceived influence at the fund in order to make this happen.
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