IMF Surveillance in Crisis. The Past, Present, and Future of the Reform Process

The global financial crisis of 2007-09, in common with many of the 1990s financial crises that preceded it, has raised important issues regarding the efficacy and legitimacy of the international financial surveillance that lies at the heart of the IMF’s operations. This paper examines post-crisis reform of IMF surveillance activities, placing contemporary reforms in their historical context. A particular focus is placed on the IMF’s involvement with financial sector surveillance. By tracing the process of surveillance reform from the 1990s, I show that the absorption of the financial sector into the Fund’s surveillance activities continue to be shaped by deeply embedded dynamics. Recent reforms have been designed to enhance the Fund’s capacity to assess the systemic spill-over effects of developments in key members’ financial sectors; however, aspects of the organisation’s structure, culture, and mandate will limit the extent to which these aims are effectively met. Drawing extensively on Executive Board and archival documents, I show that current proposals fail to fully appreciate the complexity of global financial networks, and that current reforms have their roots in past (failed) experience.