ISTANBUL - The G30, a group of prominent bankers, policymakers and economists, called on Monday for sweeping reforms to the International Monetary Fund, warning that the impetus for change would wane as pain from the financial crisis fades.
In a report released on the sidelines of the semi-annual IMF and World Bank meetings, the Group of 30 said nations needed to seize the opportunity to change the way the Fund is governed to reflect shifts in global economic power.
It said the Fund should create a new governing body, which it dubbed the IMF Council, to oversee the global lender's executive board. The council would have a membership that provides more weight to emerging economies such as China, India and Brazil.
The group also proposed that the size of the IMF's board be reduced to 20 seats from 24 by halving the number of seats held by European countries to four, and called for quick action to give emerging economies more IMF voting power.
We are recommending that the revision of IMF quotas should be accelerated to realign existing shares with members' economic weights in the global economy, said Bank of Mexico Governor and G30 member Guillermo Ortiz.
In the future quota adjustments would be better achieved through a regularized automatic process, he said. China had made a similar plea before the IMF's steering committee on Sunday.
The IMF has been tasked by the Group of 20 developed and emerging nations to increase its economic and currency surveillance efforts and provide reviews of steps G20 nations are taking to reduce global trade and financial imbalances.
But these efforts would be more effective if the Fund was more representative of the global economy, said G30 Chairman Jacob Frankel, a former governor of the Bank of Israel.
The authority of the Fund depends on the respect that the Fund enjoys, Frankel added.
(Reporting by David Lawder and Axel Bugge; Editing by Tim Ahmann)