WASHINGTON (AFX) - The US can only support an increase in smaller nations' voting power at the IMF if the move is accompanied by reforms at the global financial institution, US Treasury Secretary John Snow said.
'Comprehensive, fundamental reform is needed if the IMF is to remain legitimate and relevant to its membership,' Snow said in remarks prepared for delivery at the IMF spring meeting.
Snow said the US will demand a 'downpayment' on reforms at the next IMF meeting in Singapore before it can support quota increases.
The fund would then be able to revise its quota figures to reflect member countries' GDP figures, he said.
Quotas largely determine a member's voting power in IMF decisions. The US and other wealthy countries have the biggest quotas, and thereby the biggest influence over decisions to lend.
The US currently has a quota of 17.1 pct, while Brazil's is just 1.5 pct, India's is 2 pct and China's is 3 pct
Snow said he backed G7 finance ministers' call for the IMF to tighten its surveillance of economic policies in member countries, particularly those affecting exchange rates.
'We strongly endorse greater attention to the fund's core mandate of firm surveillance of exchange rate policies and their consistency with domestic policies and the international system,' Snow said. 'This is the most basic responsibility of the IMF.' steve.whitehouse@afxnews.com mw/sw COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited