In a message dated 9/24/99 4:49:48 AM Central Daylight Time, AOL News writes: << Subj: U.S. Proposes IMF Changes Date: 9/24/99 4:49:48 AM Central Daylight Time From: AOL News BCC: Ahab42 U.S. Proposes IMF Changes .c The Associated Press By MARTIN CRUTSINGER WASHINGTON (AP) - The Clinton administration, responding to growing criticism about its policies toward Russia, says it will push for changes at the International Monetary Fund to make sure Russia and other countries don't misuse the billions of dollars the IMF provides in loans. While insisting the administration's overall approach to Russia has been sound, Treasury Secretary Lawrence Summers unveiled proposals Thursday that would call on the IMF to make wider use of independent audits and allow the lending agency to impose stiffer penalties for countries caught lying. Summers said he expected to gain backing for the proposals during a meeting Saturday of finance ministers and central bank presidents of the world's seven wealthiest countries - the United States, Japan, Germany, France, Italy, Britain and Canada. The changes would have to be approved by the IMF's governing board. ``We have a huge interest in whether Russia becomes a market economy, on whether it stays a democracy,'' Summers said in announcing the package of proposed reforms. The new requirements are intended to strengthen the IMF's ability to guard against the misuse of its loans - one of the allegations that has been made against Russia in a widening investigation of corruption and money laundering in that country. The package of proposals comes amid renewed criticism from Republicans in Congress that the Clinton-backed IMF approach to Russian economic reform has been a huge failure. The United States will ask that the IMF be required to order independent audits of central banks in countries suspected of misusing loans. It also wants the IMF to be given greater leeway to penalize borrowing countries caught lying to the agency about domestic economic conditions and be allowed to impose penalties for abuse even after a country has stopped borrowing from the agency. The G-7 discussions this weekend are being held in advance of the annual meetings of the 182-nation International Monetary Fund and its sister lending organization, the World Bank. Financial markets are anticipating that participants also may discuss a plan to jointly intervene in currency markets to buy dollars in support of the U.S. currency, which is close to a 44-month low against the Japanese yen. The dollar's weakness has unnerved American investors, who fear it will boost the cost of imports and add to inflation, and has been cited as a key reason for falling U.S. stock prices. Summers refused to be drawn into a discussion on whether the G-7 might consider coordinated intervention to support the dollar. He said he will stress the need for more balanced global growth - with increased economic activity in Europe and Japan taking the pressure off the U.S. economy. But Summers said Japan's recovery remained uncertain, making it critical for the Japanese government to remain committed to ``continued stimulus, using all available tools'' to boost domestic-led demand. On another matter., Summers and IMF Managing Director Michel Camdessus said they were optimistic that agreement may be reached on a plan to increase the amount of debt relief provided to the world's 41 poorest nations. A the key elements of the plan is the sale of 14 million ounces of the IMF's gold reserves to IMF member countries, rather than on the open market, and use the proceeds to forgive debt held by these countries. AP-NY-09-24-99 0548EDT Copyright 1999 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without prior written authority of The Associated Press. Announcement: America Online has added Reuters newswires to News Profiles. To add Reuters articles to your daily news delivery, go to KW: <A HREF="aol://5862:146">News Profiles</A> and click on "Modify Your News Profiles." Then click "Edit" and add Reuters from the list on the left. To edit your profile, go to keyword <A HREF="aol://1722:NewsProfiles">NewsProfiles</A>. For all of today's news, go to keyword <A HREF="aol://1722:News">News</A>. >>
U.S. Proposes IMF Changes .c The Associated Press By MARTIN CRUTSINGER WASHINGTON (AP) - The Clinton administration, responding to growing criticism about its policies toward Russia, says it will push for changes at the International Monetary Fund to make sure Russia and other countries don't misuse the billions of dollars the IMF provides in loans. While insisting the administration's overall approach to Russia has been sound, Treasury Secretary Lawrence Summers unveiled proposals Thursday that would call on the IMF to make wider use of independent audits and allow the lending agency to impose stiffer penalties for countries caught lying. Summers said he expected to gain backing for the proposals during a meeting Saturday of finance ministers and central bank presidents of the world's seven wealthiest countries - the United States, Japan, Germany, France, Italy, Britain and Canada. The changes would have to be approved by the IMF's governing board. ``We have a huge interest in whether Russia becomes a market economy, on whether it stays a democracy,'' Summers said in announcing the package of proposed reforms. The new requirements are intended to strengthen the IMF's ability to guard against the misuse of its loans - one of the allegations that has been made against Russia in a widening investigation of corruption and money laundering in that country. The package of proposals comes amid renewed criticism from Republicans in Congress that the Clinton-backed IMF approach to Russian economic reform has been a huge failure. The United States will ask that the IMF be required to order independent audits of central banks in countries suspected of misusing loans. It also wants the IMF to be given greater leeway to penalize borrowing countries caught lying to the agency about domestic economic conditions and be allowed to impose penalties for abuse even after a country has stopped borrowing from the agency. The G-7 discussions this weekend are being held in advance of the annual meetings of the 182-nation International Monetary Fund and its sister lending organization, the World Bank. Financial markets are anticipating that participants also may discuss a plan to jointly intervene in currency markets to buy dollars in support of the U.S. currency, which is close to a 44-month low against the Japanese yen. The dollar's weakness has unnerved American investors, who fear it will boost the cost of imports and add to inflation, and has been cited as a key reason for falling U.S. stock prices. Summers refused to be drawn into a discussion on whether the G-7 might consider coordinated intervention to support the dollar. He said he will stress the need for more balanced global growth - with increased economic activity in Europe and Japan taking the pressure off the U.S. economy. But Summers said Japan's recovery remained uncertain, making it critical for the Japanese government to remain committed to ``continued stimulus, using all available tools'' to boost domestic-led demand. On another matter., Summers and IMF Managing Director Michel Camdessus said they were optimistic that agreement may be reached on a plan to increase the amount of debt relief provided to the world's 41 poorest nations. A the key elements of the plan is the sale of 14 million ounces of the IMF's gold reserves to IMF member countries, rather than on the open market, and use the proceeds to forgive debt held by these countries. AP-NY-09-24-99 0548EDT Copyright 1999 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without prior written authority of The Associated Press. Announcement: America Online has added Reuters newswires to News Profiles. To add Reuters articles to your daily news delivery, go to KW: <A HREF="aol://5862:146">News Profiles</A> and click on "Modify Your News Profiles." Then click "Edit" and add Reuters from the list on the left. To edit your profile, go to keyword <A HREF="aol://1722:NewsProfiles">NewsProfiles</A>. For all of today's news, go to keyword <A HREF="aol://1722:News">News</A>.
