The crisis at the International Monetary Fund goes far beyond whether Managing Director Kristalina Georgieva clings to her job or is pushed out less than halfway through her five-year term. The IMF increasingly resembles a relic striving to be inoffensive yet important. Its top priorities need to be clarity of mission, figuring how to use its considerable resources, and coming to terms with a more marginalized role. The lender could use a few red lines, too.  Created in 1944 to help manage the post-World War II global economy, the IMF no longer knows what it stands for. Key parts of its role have been usurped by powerful central banks, principally the Federal Reserve. Recent chiefs have been dogged by controversy. And an archaic selection process by which a European always leads the IMF — and an American runs the World Bank — becomes harder to defend each time the top job falls vacant. 

Georgieva is fighting for her leadership. The executive board spent last week reviewing the findings of an investigation by law firm WilmerHale, commissioned by the World Bank. It alleged that while working at the bank, she pressured staff to adjust data for a ranking in China’s favor. Her attorney said the probe and conclusions have “fundamental procedural and substantive errors.” The kerfuffle will probably dominate the annual meetings this week of the IMF and World Bank, conclaves typically devoted to forecasts and commentary on the health of global and national economies.  Whether Georgieva survives or not, any leader will need a clear sense of what they’re trying to do and what the IMF’s goals ought to be. The global economy has had its share of upheaval in recent decades. Ironically, that’s been accompanied by a diminishment of the fund’s clout. The high-water mark of influence was probably during the late 1990s financial crisis in Asia, when the lender led bailouts of South Korea, Indonesia and Thailand. Around the same time, emergency loans supported Russia and Brazil during meltdowns. 

Countries used to know what the IMF represented. The template went like this: go in, do the rescue, recommend austerity, budget cuts, higher interest rates and, sometimes, privatization and re-organizing banking systems. Conditionality was vital. If you didn’t make progress, you’d be cut off. The enduring image of this model was then-chief Michel Camdessus standing with his arms folded over Indonesian President Suharto signing a deeply unpopular loan agreement in 1998. The IMF has since softened around the edges, learning to love fiscal stimulus and loose monetary policy. In themselves, these are defensible adjustments to doctrine. But they also create the impression that anything goes. Listening to top officials these days, it’s hard to believe this organization was once feared as much as it was needed. Even debt monetization is cool. It all reeks of desperation to stay relevant.

Once at the center of the world financial system, the IMF risks being pushed aside by central banks, whose reach has become more global even if their mandates are tied to domestic inflation and employment. When markets buckled amid a shortage of dollars at the start of the pandemic, it wasn’t the IMF that soothed investors. It was the Fed, through an expanded use of dollar swap lines that dramatically increased the supply of bucks to foreign central banks. The world stood on the precipice of a funding crisis. Not acting would have been disastrous. 

The IMF was reduced mainly to cheering from the sidelines. “The Fed has emerged as a leviathan without peer in the international economic system,” Daniel D. Bradlow of the University of Pretoria and Stephen Kim Park of the University of Connecticut wrote in a paper last year. “It is increasingly evident that the international monetary order now revolves around the U.S. dollar and the Fed.” 

Compounding the loss of influence, the top brass has been troubled by scandal long before the fracas involving Georgieva. Recent managing directors haven’t always covered themselves with glory, though not necessarily during their time at the fund. Christine Lagarde, who preceded Georgieva and now heads the European Central Bank, was convicted by a French court for negligence for failing to overturn a 285 million euro ($296 million) payout to businessman Bernard Tapie in an arbitration case while she was France’s finance minister. (She didn’t appeal, and the IMF board backed her continued service.) Her predecessor at the fund, Dominque Strauss-Kahn, quit after he was charged with attempting to rape a hotel maid. Strauss-Kahn and the maid later settled a lawsuit. Spain’s former economy minister Rodrigo de Rato, who led the IMF before Strauss-Kahn, was jailed for fraud related to his role running a bank after leaving the fund.

The IMF, and its stakeholders, simply have to find a way to do better. An institution can only take so many crises before its credibility can’t be redeemed. It’s unfortunate that trying to steer between the U.S. and China has led to such drama for Georgieva. WilmerHale depicts her as trying to do her bit for multilateralism. Maybe that’s just too hard, or the Bretton Woods institutions are the wrong places to try. It’s difficult to find any global body, let alone a corner of the world, untouched by the competition between the two countries. A few blocks in downtown Washington, where the fund and bank nestle side by side, certainly aren’t insulated. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.

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