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Bankers want IMF to push reforms as world recovers

WASHINGTON: The world's recovery from the crisis-induced slump of 1997-99 should provide a window of opportunity for additional reforms to the world financial system, an influential bankers' group said on Monday.

The Institute for International Finance, in an open letter to ministers and central bankers meeting in Washington later this month, said emerging markets would grow some 5 percent this year, after a slim 1 percent last year.

But the IIF said it was worried about risks from the sizzling US economy, which is growing at a pace which many economists believe to be unsustainable.

"Past experience has shown that periods of enthusiasm can be followed by sharp breaks in market sentiment if difficult reform measures are postponed," said IIF Managing Director Charles Dallara.

Dallara, reiterating a long-standing message from the bankers' group, said emerging market governments needed an "ongoing dialogue" with investors.

The International Monetary Fund needed to make its country surveillance more relevant to investors and lenders, releasing its detailed annual economic surveys for all economies with substantial access to world capital markets.

The IMF is carrying out a pilot project under which it releases detailed staff reports assessing economies as diverse as the Bahamas, Finland and the United States. But these reports, like a shorter summary of the board's discussions on a country's economy, are only released if the country approves.

Dallara also said countries needed to maintain sound economic policies, improve transparency and meet international standards on official data.

"The time is right to put firmly in place the building blocks for a more resilient global financial system," Dallara said. "The far-reaching changes that have taken place in the structure of emerging markets finance over the past decade call for a basic rethinking of how market participants and public officials can effectively work together to overcome emerging markets crises."-Reuters