Joint Economic Committee, Rep. Carolyn B. Maloney, Reform of the IFIs, March 8, 2001
Good morning. I want to welcome our witnesses back for another hearing on reform of the IMF and World Bank.
As I stated during hearings on this subject in this Committee and the Banking Committee last year, I believe any reform of the International Financial Institutions (IFIs) must strike a balance.
I agree with the principles behind many of the reforms suggested by critics of the institutions. From an economic standpoint, transparency, reduction of moral hazard, and the importance of intelligible accounting procedures are all U.S. values that we should encourage in the IFIs. From a moral standpoint, the lending programs of the institutions must not contribute to undermining environmental protection and decent labor standards.
At the same time, I believe these institutions in the current forms have played important roles in preventing the spread of economic contagion.
In hearings last year I asked Secretary Summers and others what the effect of the Meltzer Commission's recommendations would have been on their ability to contain the financial crisis in 1998. They expressed concern that pre-qualification would have tied their hands. I think we should all take to heart these warnings from the members last Administration, some of whom were the among the most experienced professionals in international financial markets ever to serve in government. With an ever increasing percentage of Americans invested in securities with international exposure, I think we must act very carefully not to hamstring the IFIs should another crisis emerge in the future.
Today I look forward to the testimony of the witnesses and I look forward to future hearings on the new Administration's views on these issues.
Thank you Mr. Chairman.