US Congress divided on funding measures for IMF reforms

WASHINGTON: The US Congress has failed to agree on key funding measures for reforms at the IMF to give emerging markets more representation, prompting the global financial body to express its disappointment.

US lawmakers on Monday unveiled a roughly US $ 1 trillion spending bill that will fund the government through the end of the 2014 budget year. But the bill did not include Obama administration's proposal to increase the International Monetary Fund's resources.

The Treasury Department has been seeking to boost the US' share or quota at the IMF by shifting about US $ 63 billion from an existing credit line.

The IMF's Board of Governors approved a quota and governance reform package on December 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.

The US is holding up the 2010 agreement by all of the IMF member countries to double the its lending capacity.

Christine Lagarde, Managing Director of the IMF expressed deep disappointment that the US Congress could not take steps necessary to ratify the governance reform of the world body.

"I am disappointed that necessary steps could not be taken to implement this important governance reform," Lagarde said. "The world is evolving, and we are fully committed to helping our membership finalise what it agreed in 2010 is needed to ensure that the Fund keeps pace with global change and helps meet emerging challenges," she said.

"We understand that the US administration will continue to work on securing the necessary legislative authorisation, and we are hopeful that this will happen," she said, adding that the IMF remains fully committed to pursuing implementation of the governance reforms that have been agreed to make the Fund an even more effective and representative institution.