DSK on the IMF’s “triple comeback”
In a recent speech in Geneva, Dominique Strauss-Kahn characterized the crisis in Europe as “troubling” and said that without more urgent action on international financial regulation, “disaster is just around the corner.”
His speech reaffirmed the importance of the International Monetary Fund in the aftermath of the worst financial crisis since the Great Depression. Strauss-Kahn said it is time for the IMF to make a “triple comeback” — in global economic governance, in being at the center of global governance and in sticking to its original mission:
In the wake of a devastating global conflict, the countries of the world came together to create durable postwar institutions to secure the peace and promote economic cooperation. For a time, these institutions delivered. Then, in the 1980s, the idea took hold that we knew how to manage developed economies. A simple doctrine gradually emerged, comprising a few common-sense rules (fiscal and monetary) underpinned by the idea that markets were infallible. This was the heyday of deregulation, at least in the advanced economies. The others—the emerging and poor countries—would gradually embrace what appeared to be sound management, and, in the meantime, the IMF would advise rules that seemed to benefit them. This was the doctrine referred to as the “Washington Consensus.”
But the world has changed significantly. Rapid growth in emerging and developing economies has redefined the balance of economic power. The global financial crisis has swept away so much of the old economic order. Today, the effects of the crisis are far from over. The situation in Europe remains troubling, and the future is more uncertain than ever. But without waiting for calm to be restored, we need to start rebuilding these governance structures. It’s time for a triple comeback.
You can find more coverage of his remarks on Reuters here.