A breathing space for the IMF: A new way to fund the IMF

Global capital turns nasty

Too many risks, too few rewards

Capitalism and serfdom

The spectre of intervention

Can the IMF play supercop?

Throwing good money after bad

It is astonishing that there has been no public discussion, or debate in congress, about the IMF's utilizing the private market for the bulk of its funding. This article suggests that it can be done with a minimum of effort and in a manner that does not require the IMF to return to congress and member nations' legislatures periodically for replenishment.

Before examining the best method of using the private capital markets to supplement the IMF's resources, it is well to consider present funding procedures and certain problems in the IMF's articles of agreement. The IMF's present sources are:

• Member states' contribution of quotas relative to their size and wealth. These quotas are periodically increased but this requires legislative approval from each state, a time-consuming procedure. Perhaps more onerous is the fact that only the convertible or hard currencies of the richer nations are useable for relending, or some 40% of paid-in quotas.

• Central bank lending from the surplus or hard-currency nations.