At the G20 summit in the Australian city of Brisbane on November 15-16, Russia and other BRICS countries (Brazil, India, China and South Africa) will propose alternative solutions concerning the reform of the International Monetary Fund, involving, in particular, gradual implementation of reforms, Russian G20 Sherpa Svetlana Lukash told reporters.
“The subject of financial regulation has been dragging on since 2009 when the Financial Stability Board was formed at the London summit in 2009. This year the main focus will be on measures to prevent the risks to global financial institutions, the so-called ‘too big to fail’ problem, introduction of Basel III in the G20 countries (our country introduced the system from January 1, 2014), the discussion of shadow banking problems and the financial derivatives market,” she said.
“The most important thing for us is the still unresolved G20 problem of the IMF reform,” Lukash said. She recalled the U.S. Congress has yet to ratify the 2010 resolution. “Not only does it thwart the process of renewing the IMF in accordance with the current reality where we see a big rise in the role of emerging economies. It also prevents the decisions to double the IMF capital from coming into force,” she said
“We are expecting Russia, as well as our BRICS partners, to propose serious concrete solutions on how to reach alternative solutions, if the U.S. does not ratify this decision before the end of this year,” the Russian sherpa said.
One of the simplest options is “to untie the decision (over the IMF reform of 2010) into various parts. Since the 2010 resolution is a complex packet of agreements, which includes, among other things, amendments to the IMF charter and a decision to double its capital, and each such decision, according to the IMF rule, requires a certain number of votes for them to become effective,” the sherpa said.
“These two decisions can be untied, i.e. this packet can be split into several ones, without an approval of the U.S. Congress but at the administration’s decision. We will break up the packet and start implementing its parts accordingly, so that all agreements come into force,” the Russian Sherpa said about possible solution to the problem of reforming the IMF.