MY POINT OF VIEW

G20 leaders from around the world will be meeting in Washington DC to discuss what many think will be a new era and will restructure the way the financial system  will be doing business as opposed to the way it  has been operating since the 1940s. There is a general feeling that instruments put in place back then are all out-dated and as a result hindering the IMF from actually playing the watchdog role many governments will want to see it do.

Another pressing issue that will most probably future on the Agenda is the funding of the IMF, which as I mentioned in my last posting, is highly in need of new funders. Given the fact that countries like Russia, Saudi Arabia andChina, are members of the G20, there is a wide believe that these countries will want more saying if the fund will seek to tap into their vast reserves. So the burning question is ho much will they request?

Without any doubts, and given the complex nature of the world financial system, there is a great need for reforms within the IMF. It has been a principal organ for prescribing reforms to many countries, through its structural adjustment programs, but now the IMF needs some drastic reforms, if it needs to maintain its role as the world major financial institution.

While the current crisis have caused great havoc to the entire financial system and even crippled some countries, some find it as a great opportunity to bring in real change. For example, the BRIC nations (Brazil, Russia, India, China ) are calling for reform of the institution to give more influence to developing economies.

The EU, under the auspices of the French President Mr, Sarkozy is pushing hard for fundamental reforms within the IMF, but the extent of such reforms will remain his privacy until next. Whether he will support the need to give developing countries a more significant role within the IMF is still to be seen. However, the EU has come out clear on the need for more supervision of all financial institutions including hedge funds.

AsTim King, Simon Taylor and Jennifer Rankinsuggest in their article, the G20 2008 summit in Washington next week should be a historic summit. One thing remains clear; the summit has been triggered by the current global financial crunch and hence must be tackled through a multinational approach. To quote theBrazilian president Luiz Inacio Lula da Silva;"This is a global crisis and it demands global solutions."