Benn Steil


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Lew Does Not Need IMF Reform to Aid Ukraine

by Benn Steil and Dinah Walker
March 5, 2014


The new provisional government in Ukraine is seeking $15 billion in assistance from the International Monetary Fund.  This would represent 700% of the country’s quota with the Fund, added on top of the loans it has already outstanding, amounting to 214% of its quota.

The Fund allows members to borrow up to 200% of their quota annually and 600% cumulatively through stand-by and extended arrangements, so Ukraine is clearly seeking well in excess of this.  U.S. Treasury Secretary Jack Lew has called on Congress to back IMF quota reform, “which would support the IMF’s capacity to lend additional resources to Ukraine.”

We wholeheartedly back the IMF reform the administration seeks, but it is neither necessary nor desirable for Lew to ratchet up this fight with Congress now.

The IMF already has criteria for allowing member countries to borrow beyond the normal access limits.  And indeed, as shown in the graphic above, Greece, Portugal, and Ireland are already doing so.

Lew knows this.  Since Ukraine should also meet the criteria for above-quota borrowing, it is imprudent of him openly to question the IMF’s “capacity” to aid Ukraine as a pretext for shunting Republicans into action on broader IMF reform.

CFR Expert Roundup: The Case for IMF Quota Reform
Congressional Research Service: IMF Reforms
Macro and Markets: Make or Break for IMF Reform
Geo-Graphics: A GDP-Based IMF Would Boost China’s Voice . . . and America’s


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Read about Benn’s latest award-winning book, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order, which the Financial Times has called “a triumph of economic and diplomatic history.”

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