Opening Statements of Committee Members

Good morning and welcome to our distinguished witnesses.

I am pleased we are holding this oversight hearing on how the IMF is implementing the reforms mandated in last year's omnibus appropriations bill. I chaired a similar hearing at my Foreign Relations subcommittee back in January where Deputy Secretary Summers testified. That hearing proved to be very informative and I expect this hearing will too.

While the U.S. doesn't run the Fund, we are the single largest shareholder with 17% of the voting power. Our position at the Fund gives us great leverage in seeing that certain changes take place. Last year's reform and replenishment legislation recognized two important principles:

• First, by providing for the funding increase, the legislation recognized the important role the IMF plays in managing global and regional crises.



• Second, the reforms encompassed in the reform package represent a critical turning point on how the IMF conducts its business. Congress expects a more accountable, transparent IMF. We are also expecting the IMF to tailor its loan packages and conditions to the specific circumstances of a recipient country. This means an end to the one-size-fits-all approach of the past.

Many of us on the Committee worked on last year's legislation and take a particular interest in ensuring the reforms take place. The legislation set out requirements that the Fund's major shareholders support policies at the IMF which:

• ensure compliance with trade agreements



• eliminate government-directed lending on non-commercial terms



• require nondiscriminatory treatment in bankruptcy proceedings



• use risk-based interest rates, and



• build more transparency in the IMF's own practices and procedures.

If we are to have an IMF, and I do believe we need an IMF, it must be effective and responsive, concentrating its efforts on how and where it can make a positive difference. But we should not expect nor ask it to do everything. Expecting the IMF to do too much will set it up for failure. The IMF cannot be all things to all peoples. That was never its charter.

In the past, Congress has become engaged in IMF programs and reforms only during periodic replenishments. One of most important elements of last year's IMF $18 billion replenishment and reform legislation, was that it established a process for regular congressional oversight. This will require us to do our own job better. The new congressional oversight process includes:

• establishment of an International Financial Institution Advisory Commission to provide recommendations to Congress;



• creation of an annual report and testimony by the Secretary of Treasury on the IMF;



• a requirement that the U.S. Executive Director to the IMF facilitate for the GAO greater access to the IMF, and that the GAO prepare an annual report on IMF programs and policies; and



• a recommendation on the establishment of an IMF advisory committee consisting of elected members of legislatures of the IMF's five top contributors.

It is now Congress' responsibility to follow up and conduct vigorous oversight. This is our purpose here today. I look forward to the testimony and commend the Chairman for calling this hearing.

Thank you.

Home | Menu | Links | Info | Chairman's Page