Hearing of U.S. Senate Committee on Banking, Housing, and Urban Affairs "Oversight of the International Monetary Fund"

Hearing of U.S. Senate Committee on Banking, Housing, and Urban Affairs "Oversight of the International Monetary Fund"

Good Morning, I want to thank our witnesses for appearing today.

Today we are here to discuss the International Monetary Fund (IMF). As the largest contributor of the IMF, the United States has a responsibility to ensure that our resources are being used wisely. The United States, with the urging and support of the U.S. Congress, has been a key supporter in moving the IMF in the right direction in terms of getting more accountability and understanding of what is happening inside the IMF.

I would like to recognize and thank our witnesses for the significant contributions they have all made in making this happen. None of this would have been possible without the creation and hard work of the International Financial Institutions Advisory Commission and the continued pushing and prodding from the Treasury Department.

Although it is important that we recognize the real progress that has been made, we are not yet done. More needs to be done. It is my hope that today's hearing will further demonstrate what progress we have made and what progress we need to make in the future. This will help us determine what specific measures need addressed next.

The other main issues before us today are Argentina's attempt to conclude a new debt repayment agreement with the IMF, China's ten-year old fixed exchange rate between the dollar and the Yuan, and a potential IMF gold sale as a means of financing additional IMF debt reduction. These are significant challenges and I look forward to a thorough discussion.

For our first panel today, we welcome Randal Quarles, Acting Under Secretary of the Treasury for International Affairs. In this capacity, Mr. Quarles advises the Secretary of the Treasury on U.S. participation in the international financial system, including subjects such as financial regulation, macroeconomic policy, exchange rate policy, trade and investment, and our participation in the International Monetary Fund and the World Bank among other institutions. Prior to his most recent appointment at the Treasury Department, Mr. Quarles served as the United States Executive Director at the IMF from August 2001 through March 2002.

Our second panel will include two witnesses: Dr. Allan H. Meltzer, Distinguished Professor of Political Economy at Carnegie Mellon University and Dr. C. Fred Bergsten, Director of the Institute of International Economics here in Washington DC. Doctors Meltzer and Bergsten have extensive experience with regard to IMF. In November 1998, as part of the legislation authorizing $18 billion of additional U.S. funding for the IMF, Congress established the International Financial Institution Advisory Commission to recommend future U.S. policy toward the IMF and World Bank. Commonly referred to as the "Meltzer Commission," in reference to its Chairman, Dr. Meltzer. Dr. Bergsten also served on this Commission and co-authored the dissenting opinion.

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