US committed to completing 2010 IMF quota reform

The United States is committed to implementing the 2010 quota and governance reform of the International Monetary Fund (IMF), U.S. Treasury Department said on Wednesday. "We are actively working with Congress to get quota legislation completed as soon as possible," a Treasury spokesperson told Xinhua in a short email statement against the background of the delayed IMF quota and governance reform. The IMF previously had intended to make the 2010 reform package effective before the 2012 Annual Meetings in October 2012, but the legislatures of some important IMF members including the United States, the IMF's largest shareholder, have not given the green light to the reform package. The IMF's Board of Governors approved a quota and governance reform package on Dec. 15, 2010. The package included a doubling of IMF quotas and a shift in quotas to dynamic emerging markets and under-represented countries, and a proposed amendment to reform the executive board that would facilitate a move to a more representative and all-elected executive board. Legislation of U.S. Congress is needed to increase the U.S. quotas in the IMF by approximately 65 billion U.S. dollars and simultaneously reduce by an equal amount U.S. participation in the IMF's New Arrangements to Borrow (NAB), a pool of fund supplementing the IMF's quotas in case of crisis. The NAB, which can provide up to about 560 billion dollars fund to the IMF, is a set of credit arrangements between the IMF and 38 member countries and institutions, including the United States and China. U.S. latest action will result in no overall change in U.S. financial participation in the Washington-based global lender. Each IMF member country is assigned a quota based broadly on its relative position in the world economy. Quotas determine a country's maximum financial commitment to the IMF, play a role in decisions on members' access to Fund resources, determine members' shares in general allocations of Special Drawing Rights (SDRs), and are closely linked to their voting power. Some emerging economies have demanded for years more voting power in the IMF in line with their increased weights in the global economic system. The 2010 reform package will make China the third largest voting member in the IMF. The U.S. quota share in the IMF will decrease from the current 17.69 percent to about 17.4 percent and its voting rights will edge down to about 16.5 percent from the current 16.75 percent after the completion of the reform, still giving the nation veto power over key IMF decisions, IMF figures revealed.