Global credit crisis 'proves need for IMF surveillance'

Washington: The global credit crisis of the past summer showed that the International Monetary Fund (IMF) still has an important surveillance role in the world economy, according to the president of the European Bank for Reconstruction and Development (EBRD).

Jean Lemierre said, however, that both the IMF and the EBRD should allow more participation by emerging markets countries in their decision-making process, as developing economies gain more importance globally.

"It is very important for this type of institution, and I say this for the EBRD and the IMF, to create a sense of ownership," Lemierre said. "Emerging markets are more and more important in the global economy and they must feel at home, otherwise the role I see for them will not work. Even if it is simply to lecture and instruct, it will not work," he said.

Financial watchdog

Lemierre, who was once a contender to head the IMF, affirmed it was not up to him to say how the fund should be reshaped, but stressed that the institution still has an important global surveillance role.

"I think that what has happened this summer is also a good reminder that there must be somewhere a place where all the countries meet, where they share their assessments about the solidity of the macroeconomic policies and the financial sectors," he suggested.

"You may say the market will do it. But the market will do it except when there is an overshooting, and you have seen this during the subprime crisis."

Lemierre said the EBRD, is always adapting to invest public sector money where it is needed.