Bank of England boss urges US support for IMF and World Bank

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Bank of England boss urges US support for IMF and World Bank

The Governor of the Bank of England has urged continued US support for two major global economic institutions.

Andrew Bailey told the BBC he was “following extremely closely” whether the Trump administration will change its support for the International Monetary Fund (IMF) and the World Bank.

Sources in Washington said the two institutions were caught by a White House executive order for a review of United Nations (UN) and other international organisations.

Mr Bailey said it is “very important that we don’t have a fragmentation of the world economy”.

He said “a big part of that is that we have support and engagement in the multilateral institutions, institutions like the IMF, the World Bank, that support the operation of the world economy. That’s really important.”

There is growing concern in finance ministries and central banks around the world about US disengagement from the institutions, with radical changes to the global financial system now being floated in Washington DC.

The “Project 2025”

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for Trump’s presidency, which was authored by figures who are now key White House staff, recommended withdrawal from both institutions and termination of financial contributions.

It said the institutions “espouse economic theories and policies that are inimical to American principles of free market and limited government principles.”

Following a White House executive order, all international intergovernmental organisations of which the US is a member will be reviewed to determine if they are “contrary to the interests of the US” and “can be reformed”.

The six month review may then provide recommendations for withdrawal to President Trump.

Sources in the G20, or Group of Twenty – a club of countries that meets to discuss global economic and political issues – said that during his first term, Trump’s team suggested abolishing the IMF at the 2018 Buenos Aires Summit.

The IMF and World Bank are specialised agencies of the UN.

The US is the largest shareholder in both the Fund and the Bank, institutions which were created by the post-war Bretton Woods Conference 80 years ago.

The IMF provides last resort lending for nations in financial trouble, and surveys economic problems.

The World Bank gives money and cheap loans to developing countries for poverty alleviation and development.

The Trump administration is yet to appoint staff to this area, but USAID’s development spending is currently the focus of Elon Musk’s Department of Government Efficiency cuts.

Some members of the administration are believed to be particularly focused on the World Bank’s loans to China.

Asked about the possibility of the US leaving the Fund, the IMF said yesterday it had a “long history” of “working with successive US administrations”.

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