Quote:
WASHINGTON -- The International Monetary Fund's executive board voted Friday to boost the role of emerging economies within the organization as part of a move to increase its role as the world's arbiter on economic matters.
The vote to overhaul its governance structure is a critical part of an agreement reached in October by finance ministers from the Group of 20 industrialized and developing nations. The IMF pledged to hold the vote before the G-20 leader's summit, set for Nov. 11-12.
The change will result in increased powers for China, Brazil, Russia and India by allowing them to become larger shareholders in the IMF. The changes include a rebalancing of quota shares, which determine voting powers of IMF member countries as well as the financial contribution each country contributes to the fund. The changes will also affect which countries hold seats on the IMF's executive board.
The changes would also double the total contributions countries make to the IMF, a figure the IMF put at $755.7 billion at current exchange rates.
Quote:
IMF officials have called the changes "historic", and there is hope in the U.S. and Europe that by giving emerging economies a greater role in the fund would cement the legitimacy of the institution as a global financial referee. Additionally, a greater buy-in by more dynamic economies could strengthen the fund's function.