UPDATE 1-IMF chief declares 'IMF is back', doubts linger
(Adds British comment in paragraph 5, US comment in paragraph 10)
WASHINGTON, April 10 (Reuters) - After three distracting years modernizing the International Monetary Fund, its head Dominique Strauss-Kahn declared on Thursday "the IMF is back" even as criticisms of the changes lingered.
With global finance chiefs likely to sign off on the final two and the most contentious of a string of reforms which got underway in 2006, Strauss-Kahn said the IMF would now try to reassert itself into the forefront of global economic oversight.
"We have to go back to work now that our internal problems are solved," Strauss-Kahn told a news conference before weekend World Bank and IMF meetings of global finance chiefs.
The fund plans to expand its surveillance of the global economy and Strauss-Kahn said the IMF was well-positioned to provide policy advice on blunting the economic impact from financial crisis.
British finance minister Alistair Darling said on Thursday the IMF needs to develop an early warning system to spot crises, and said it needs to be held to account for its performance if future financial crises are to be prevented.
The institution, which handed out billions of dollars in the past to rescue developing nations from economic peril, has long grappled with its changing role as financial crises have declined and fewer countries have turned to it for funding.
Some member countries want it to step up its monitoring of global economic activity to heighten its profile in a world complicated by the rising influence of emerging powers.
Some of the IMFs biggest reforms -- shifting voting power more toward emerging economic powers and overhauling the IMF's 62-year-old financial mechanism with spending cuts -- have consumed the institution in the midst of the largest financial crisis since the Great Depression.
Critics said the IMF's calls for action over the U.S. housing crisis and possible spillovers were ineffective.
Strauss-Kahn fired back, saying the IMF should not be blamed for missing warning signs of the financial crisis because the United States rejected a banking regulatory and oversight method, a Financial Sector Assessment Program, or FSAP, the IMF has suggested.
"The IMF has done extensive analysis of the US financial system and regulations," a U.S. Treasury spokesman said, "An FSAP is not the only vehicle for doing this," he added. According to an August 2007 IMF document on the U.S. economy, Treasury agreed to start an FSAP in late 2009.
By the end of April, the IMF's 185 member countries will vote on its reforms, putting the IMF in better stead to focus on its mission of ensuring global financial stability.
Members are expected to agree to put the IMF's finances on more solid footing by selling 403 tonnes of gold to fill an income gap and streamlining to fund to pre-Asia crisis levels, including 380 job cuts.
Strauss-Kahn said the changes represent the first deep reforms of a UN institution. Continued...
