As it faces a potential shortfall in funding, the International Monetary Fund (IMF) announced on Thursday that it would enlist the help of prominent financial figures to help find new ways to meet expenses.
IMF managing director Rodrigo de Rato appointed JP Morgan Chase International President Andrew Crockett to chair the group, which also includes former U.S. Federal Reserve Chairman Alan Greenspan, the President of the European Central Bank Jean-Claude Trichet, and the Governor of the People's Bank of China Zhou Xiaochuan.
I look forward to their offering recommendations that can command the support of the membership for a new financing model for the IMF that will allow us to continue to play our central role in the international monetary system, Rato said in a statement.
The IMF, which expects to post a loss for FY 2007, currently uses interest earned from loan repayments to finance its administration. However that model proved costly when Argentina and Brazil decided this year to repay their loans early, leaving the IMF with a $110 million shortfall.
The IMF said in a statement that the current method of covering expenses is out of date at a time when countries belonging to the fund increasingly use private capital flows.
The committee will focus on long-term changes and notes that there is a potential for a negative statement in the coming years.
A full list of the members in the committee.
Andrew Crockett, President of JP Morgan Chase International and former General Manager of the Bank for International Settlements. Its members are Mohamed A. El-Erian, President and Chief Executive Officer of Harvard Management Company; Alan Greenspan, Chief Executive Officer of Greenspan Associates and former Chairman of the Federal Reserve Board; Tito Mboweni, Governor of the Reserve Bank of South Africa; Guillermo Ortíz, Governor of the Bank of Mexico; Hamad Al-Sayari, Governor of the Saudi Arabian Monetary Agency; Jean-Claude Trichet, President of the European Central Bank; and Zhou Xiaochuan, Governor of the People's Bank of China.