U.S. Treasury Secretary Jack Lew urged members of Congress on Thursday to approve quote and governance reforms to the International Monetary Fund to ensure U.S. leadership in the institution.
“Part of my job is to work to create the most favorable external environment for U.S. jobs and businesses,” Lew said in prepared remarks before the House Financial Services Committee. “The international financial institutions – the International Monetary Fund and multilateral development banks – are indispensable partners in this effort, and it is imperative that we preserve our leadership in these institutions. Our investments in these institutions foster a more stable and vibrant global economy, which is critical to a growing U.S. economy.”
In 2010, the U.S. secured reforms at the G-20 Seoul Summit to preserve the U.S. veto without increasing the country’s financial commitment to the institution. The Obama Administration has released draft legislation that would curb U.S. participation in New Arrangements to Borrow and increase the size of the U.S. quota in the IMF by $63 billion.
“The 2010 quota and governance reforms are a good deal for the United States and the global economy,” Lew said. “Without these reforms, we risk a loss of U.S. influence in the IMF as other countries seek to enhance their stature outside of the IMF’s quota-based financial and governance structures.”
The IMF has helped to restore financial stability in Europe, which has borne the majority of financial support to EU member countries. The EU accounts for over 20 percent of all U.S. exports, and 60 percent of foreign direct investment in the U.S. comes from EU companies.