Washington, 5 October 1998 (RFE/RL) -- With virtually every senior or major finance official from around the globe gathered in Washington this week, the architecture and operation of the world's financial system is getting a vigorous airing.
The finance ministers and central bank governors of nearly all of the International Monetary Fund's (IMF) 182 member nations are in the U.S. capital to attend the annual meetings of the fund and the World bank, which formally open tomorrow morning.
They have been joined by an unusually large number of prime ministers -- including those of Ukraine, Romania, Armenia, and Moldova -- in addition to dozens of other senior government officials simply because it is the one place and one time when they can see counterparts from around the globe merely by walking down a hotel corridor or driving a few city blocks.
With thousands of senior finance and other officials from around the world gathered in one place, it is natural that every player in the commercial financial field needs to be there too.
The gathering began last week with dozens of side meetings, seminars, conferences, cocktail parties, and business dinners, and will continue right through the end of the plenary meetings Thursday.
The tone was set by the Saturday meeting of Finance Ministers and Central Bank governors of the G-7 group of major industrial nations -- the U.S., Great Britain, Germany, France, Japan, Italy, and Canada -- who said the world's economy, while in serious difficulty, should recover if everyone pitches in and some reforms are introduced into the global financial system.
Those same ministers were among the 24 who held the seats in the IMF's policy-setting Interim Committee, which met all day and into the night on Sunday. The 24 represent all IMF member nations either individually or in groups.
That committee agreed that the world economy has worsened considerably since last spring, scaling down prospects for economic growth and trade all around the globe.
It said the recent crises, in Asia, Russia, and now in Latin America, have exposed "broader and deeper difficulties" in the system, underscoring the need to move ahead with reforms of its architecture.
Despite many different words, the proposals for reforming the system agree on basic points -- a need to improve transparency and reporting by both public and private sectors so that financial markets are not taken by surprise as they were in Asia and Russia; the need to have better supervision of financial institutions from banks to investment funds; a need to be more careful in liberalizing the movement of capital, to make sure sudden inward or outward flows don't sink economies, as they did in Asia and Russia; and the need to strengthen the ability of the IMF and the World Bank to help in crises.
The U.S. has invited the finance ministers and central bank governors of 26 nations to meet privately this evening at a Washington hotel to mull over proposals to carry out these reforms. The group was originally the G-7 plus 15 key emerging market economies, including Russia. But four European nations -- the Netherlands, Sweden, Switzerland, and Norway -- said they didn't want to be left out, so will be joining the group.
Discussing and debating the hows and whys of the global finance system will continue all week. What definitive actions will emerge at the end remains to be seen.