An IMF Just for Emerging Markets

The article discusses the role of the International Monetary Fund as the lender of last resort to countries wresling with economic crisis. The IMF was set up after World War II, and its structure by then was based on the balance of power between the U.S. (its main creditor) and European countries. Nowadays, the IMF's role in stabilizing the world economy might be limiting because of the prejudices among the developing countries against the dominating roles of the U.S. and the Western Europe in the IMF. During the Asian financial crisis in 1997, the IMF lent out funds to many Asian countries. However, it also imposed on some of those countries strict monetary and fiscal policies which were not very efficient at that time. The author mentions the idea of a new version of the IMF called Emergency Monetary Fund, which might become the lender that developing countries can rely on.