Center for Governance and Sustainability

at the University of Massachusetts Boston

Emergency Liquidity

pg. 25 :   . . . reforms of the International Monetary Fund’s Articles of Agreement that would authorize the International Monetary and Financial Committee (IMFC) at the request of the Managing Director to issue Special Drawing Rights for the provision of emergency liquidity in times of financial distress


Readers' Guide Comment on “at the request of the Managing Director”      

This proposal elevates the Managing Director of the IMF into a global central bank head, structurally making the head of IMF the globalized equivalent to the current head of the Federal Reserve or the Bank of England. The report makes no other recommendation that would expand the scope or the responsibility of any other executive director of an intergovernmental body.

Readers' Guide Comment on “in times of financial distress”

While the section is called ‘economic cooperation’, the power to create Special Drawing Rights (SDRs ) is limited to times of ‘financial distress’, not the broader ‘economic’ distress. The very narrow wording here excludes proposals for Special Drawing Rights to address global poverty, the adverse effects of climate change, or the economic consequences of armed conflicts.

Related Ideas: Four Tools ; Managing financial globalization; Tool Two

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