Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Report: IMF Did Not Alert World to Crises




WASHINGTON -- The International Monetary Fund failed to warn forcefully of risks to the global economy and is getting its priorities wrong in assessing problems around the world, according to a report released Tuesday.


The strongly worded report, an external assessment of IMF surveillance activities, urged the fund to concentrate on its traditional core areas - currency regimes and macroeconomic indicators. It complained about poor communication between IMF departments and between the Fund and the World Bank.


"The IMF is in danger of losing its focus, without gaining much in compensation," former Bank of Canada governor John Crow, one of the authors of the report, said at a news conference.


He added: "The Fund is not that good at spreading its views or spreading its information."


The experts said IMF surveillance - its advice to member states - was comprehensive and well-regarded. But staff tended to be too cautious, perhaps because they were afraid of upsetting member governments.


Surveillance forms a key element of IMF activities but it has also been controversial, amid complaints that the IMF did not spot banking-sector problems, publicize increasingly strongly worded warnings to Thailand before its July 1997 currency crash or realize that Thailand's problems could have a dangerous impact in Asia and beyond.


The Fund published a defense of its activities at the same time as Crow's report. IMF researchers said their 1997 economic reports contained warnings of risks to emerging markets, and Fund staff said publishing World Economic Outlooks each quarter, as Crow's report recommended, would be too labor-intensive.