IFIACInternational Financial Institutions Advisory Commission
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The problem is that the IFIAC majority would authorize the Fund to lend only to countries that have prequalified for its assistance by meeting a series of criteria related to the stability of their domestic financial systems.
For example, the IFIAC model would have prohibited the Fund from lending to any of the East Asian crisis countries in 1997-98.
In contrast, the CFR report would retain the fiscal and monetary policy conditionality necessary to underpin improvements in the balance of payments in crisis countries, and it would avoid the "all or nothing" flaw of the IFIAC proposals by permitting IMF financial support to countries of systemic importance.
Professor Jeffrey Sachs, a member of the IFIAC majority, presented its views on these development issues to the Executive Board of the IMF on March 21.
I believe that neither the CFR nor the IFIAC reports address some of the key problems still facing the international monetary system, as indicated in the additional views that several other participants and I appended to the CFR report:
the IMF needs to guide emerging market economies on how to manage their flexible exchange rates, since very few will (or should) float freely despite the advice of most academics (and the IFIAC report) to do so;
The CFR and IFIAC reports point the way toward a number of constructive steps.