Updated August 30, 2019
The International Monetary Fund
Overview
dependent on the peer pressure exercised by other IMF
The International Monetary Fund (IMF, the Fund), founded
member countries, and increasingly the global financial
in 1945, is an international organization that works to
sector, as most IMF analysis of global economic risks is
ensure the stability of the international monetary system.
publicly available.
The United States is a founding member of the IMF and the
largest financial contributor. This In Focus report provides
Loans. The IMF makes loans to countries experiencing
a brief overview of the IMF and its operations.
balance-of-payments difficulties, which generally means
they are facing problems paying for necessary imports
The IMF: Key Facts and Figures
or servicing their debt payments. The temporary
Membership: 189 Countries.
financial assistance enables countries to stabilize their
economies while implementing economic reforms. The
Headquarters: Washington D.C.
IMF disburses its loans in phases (“tranches”) after
Executive Board: 24 Directors; the United States, China,
verifying that specified economic conditions and
Japan, Germany, France, and the United Kingdom each have their
reforms have been met (“conditionality”).
own representatives; others are formed into constituencies.
Total Resources: $661 bil ion in quota; $693 bil ion of
Capacity Development. The IMF provides technical
additional pledged or committed resources.
assistance and training to help member countries
U.S. Financial Commitment: about $115 bil ion to IMF quota
strengthen their capacity to design and implement
and $39 bil ion to supplemental funds.
effective policies. The IMF provides technical assistance
in monetary and financial policies; fiscal policy and
Largest Borrowers: Argentina, Ukraine, Greece, and Egypt.
management; statistical data complication; and

economic and financial legislation.
The IMF has reinvented itself several times since it was
Organization and Structure
created. From 1946 to 1971, during the so-called Bretton
The IMF’s governing document, the Articles of Agreement,
Woods monetary system, the IMF oversaw a network of
provides for a three-tiered governance structure with a
pegged exchange rates centered on the value of the U.S.
board of governors, an executive board, and a managing
dollar. When currencies (other than the U.S. dollar, which
director. The board of governors is the highest policy-
was then fixed to the price of gold) suffered balance of
making authority of the IMF. All countries are represented
payments imbalances arising from their normal trading and
on the board of governors, usually at the finance minister or
financial relationships, the IMF provided short-term
central bank governor level. Day-to-day authority over
financing to cover temporary hard currency shortfalls.
operational policy, lending, and other matters is vested in
the board of executive directors, a 24-member body that
After the collapse of the Bretton Woods system of fixed
meets three or more times a week to oversee and supervise
exchange rates, IMF members enacted a comprehensive
the activities of the IMF. As the largest shareholder, the
reform of the organization and its operations beginning in
United States has its own seat on the executive board. The
1975. The IMF transformed itself from being an
executive board or board of governors of the IMF can
organization focused exclusively on issues of foreign
approve loans, policy decisions, and many other matters by
exchange convertibility and stability to one having a
a simple majority vote; however, a supermajority vote is
broader mandate: lending for a range of financial crises,
required to approve major IMF decisions. The
including debt, currency, and banking crises, and engaging
supermajority may require a 70% or 85% vote, depending
on a wide range of issues including capital flows, financial
on the issue. At 16.52% of total voting power, the United
regulation, and surveillance of the global economy.
States has unique veto power over major policy decisions.
Key Functions
The primary source of IMF lending resources is the
Since the 1970s, the IMF’s mandate of promoting
financial contributions or quota subscriptions of its member
international monetary stability has translated into three
nations. A country’s proportion of quota, or quota share,
main functions:
broadly reflects its weight in the global economy; larger
economies have larger quotas. A member’s quota also
Surveillance. The IMF regularly monitors the economic impacts the country’s voting power at the IMF. Countries
and financial policies of its member countries. Through
with larger quotas, and thus larger financial commitments
surveillance at the global level and in individual
to the institution, have a greater say in how the IMF is run.
countries, the IMF highlights possible risks to domestic
The United States contributes $117 billion to the IMF quota
and external stability and advises on needed policy
(17.46%). In addition, the United States has contributed $44
adjustments. The effectiveness of IMF surveillance is
billion to funds at the IMF that supplement quota resources.
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The International Monetary Fund
Issues for Congress
have further limited the ability of the U.S. to vote for large
Size of the IMF
IMF programs, especially, where the Fund is co-financing
with larger creditors.
To support its recent additional lending, IMF members
agreed in December 2010 to a wide-ranging set of reforms
Figure 1. Total IMF Lending, 2007 and 2017
that also doubled the IMF’s quota (meaning its member
Mil ions of U.S. Dol ars
contributions). In addition to increasing the size of IMF
resources available to fight financial crises, the reforms also
increased the financial contributions (and voting power) of
emerging economies relative to advanced economies.
China, for example, increased its quota share at the IMF by
2.4%. Congress passed legislation authorizing U.S.
participation in the reform package in December 2015 (P.L.
114-113) and the reform package took effect in January
2016.
In addition to its quota resources, the IMF can draw on an
additional $692 billion, comprised of bilateral borrowing
arrangements and two supplemental funds, the New
Arrangements to Borrow and the General Arrangements to
Borrow. The future availability of these supplemental funds
is uncertain. The NAB was renewed in November 2016 for
a five-year period. U.S. contributions to the NAB are set to
sunset in 2021. Further renewal requires congressional
authorization. It is also uncertain whether countries
providing bilateral credit lines to the IMF will be willing to
extend them further when they expire in 2019 (extendable
for a further year through end-2020). These issues will
likely shape debate on the next IMF quota review in 2019.
The Trump Administration does not appear to support a
boost in Fund resources. At a December 2018 hearing
before the House Financial Services Committee, then
Treasury Undersecretary David Malpass told Members that
“[the Administration is] opposed to changes in quotas given
that the IMF has ample resources to achieve its mission.”
IMF Lending
The most controversial of the IMF’s activities is its lending
program, and its role in financial crises. In the past decade,
the IMF made several large loans to European countries. In
the years immediately following the 2008-2009 global
financial crisis, the IMF lent too many Central and Eastern
European countries. More recently, the IMF has lent to

Western European countries, including Greece and
Source: International Monetary Fund.
Portugal. Europe’s borrowing from the IMF has declined in
recent years, yet continues to make up a large share of
Moral Hazard
outstanding IMF loans (Figure 1).
Some Members of Congress, among other observers, have
also considered concerns that IMF lending, may generate
In addition to representing a majority of the IMF’s
moral hazard. Some have argued that crisis countries may
outstanding loans, the IMF made exceptionally large loans
more be willing to engage in risky financial behavior since
to some European countries. According to IMF rules, the
they can anticipate financial assistance from the IMF if they
amount a country is able to borrow from the IMF is related
run into economic trouble. Other analysts argue that while
to the country's quota. In most instances, countries may
the IMF may generate moral hazard, international financial
borrow several multiples of their quota. The current limit is
markets are inherently unstable. A variety of factors in a
145% in a 12-month period; 435% over the lifetime of a
particular crisis, such as coordination problems between
program. The conditionality and performance standards
creditors and the country in crisis, can spark a financial
attached to a loan become more rigorous and demanding as
crisis that can quickly spread to neighboring countries or
its size (relative to the borrower's quota) increases. While
beyond, they say, and the IMF is needed to respond to
provisions for exceptional access have existed since the
crises.
early 1980s, the relative amount of lending skyrocketed
with the recent European programs. In an effort to address
Martin A. Weiss, Specialist in International Trade and
this issue, Congress insisted on restrictions on exceptional
Finance
access when it approved the quota and governance reforms.
Legislation introduced but not passed in the 115th Congress,
IF10676
The IMF Reform and Integrity Act (H.R. 1573), would
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The International Monetary Fund


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https://crsreports.congress.gov | IF10676 · VERSION 6 · UPDATED