Paulson Speaks At IMFC Meeting

by Mike Godfrey, Tax-News.com, Washington

23 October 2007

US Treasury Secretary, Henry M. Paulson Jr, has spoken out about global, economic and financial developments at the recent International Monetary Fund (IMF) Financial Committee Meeting.

Speaking with regard to the world economy, Paulson observed that:

"Real global GDP growth is expected once again to be near 5% this year and next, with emerging markets providing well over half of that growth. In addition, there has been some progress toward strengthening domestic demand abroad on a sustainable basis, which should help maintain forward growth momentum. Recent credit market events will impose some penalty on US economic growth, but I expect continued growth."

The need for reform at the IMF was also touched upon by the US Treasury Secretary, who stated that:

"The IMF is an essential institution for global monetary cooperation, and we place a high priority on supporting meaningful IMF reform in order to maintain its credibility and relevance in the rapidly changing global economy."

He continued: "The IMF's governance structure needs fundamental reform to reflect the realities of the evolving global economy. Quotas must be adjusted significantly to give greater weight to dynamic emerging market economies, while protecting the voice of the poorest countries. We believe a clear division of labor between the IMF and World Bank, in terms of areas of policy focus and respective financing roles, will serve to strengthen the work of both institutions. We therefore welcome continued follow-up on the recommendations of the Malan Report on Bank-Fund Collaboration. "

Several other key issues were broached by Paulson, in particular the safeguarding of the country's financial system.

On this topic, he observed that:

"We must continue to apply robust efforts to combat illicit money flows to safeguard the financial system from abuse, support development and economic growth, and protect citizens worldwide. By implementing the Financial Action Task Force's (FATF's) international standards on money laundering and terrorist financing, countries worldwide can help make the global financial system an inhospitable venue for terrorists, proliferators, narcotics traffickers, and other rogue actors. FATF's close cooperation with the IMF and World Bank has been vital to these continued efforts, and we applaud their sustained commitment."

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