The Banking Executive Magazine - September 2025 Issue

Rising up to The Global Challenges KEY REFORMS NEEDED The IMF is adapting, but reform is es- sential to ensure it remains fit for pur- pose in a world shaped by climate risk, geopolitical shifts, and eco- nomic inequality. Key reforms needed include: • GOVERNANCE REFORM: The IMF Voting power is heavily skewed toward advanced economies. The needed reform in- volves a rebalance of quotas and voting shares to give emerging markets and low-income coun- tries. This will make decision-mak- ing more democratic and representative of today’s global economy. • LENDING INSTRUMENTS: The IMF Quota-based access limits flexibility and fairness. The reform needed involves developing more responsive, needs-based lending tools that aren’t tied strictly to quo- tas. This will ensure timely support for countries facing climate shocks, pandemics, or debt distress. • DEBT SUSTAINABILITY AND RESTRUCTURING: The current IMF debt relief mech- anisms are slow and fragmented. The needed reform involves form- ing a streamlined, transparent framework for sovereign debt re- structuring, especially for low-in- come countries. This will prevent prolonged economic crises and promote recovery. • CLIMATE INTEGRATION: Climate risks are not fully embed- ded in IMF surveillance and lend- ing. The needed reform involves making climate vulnerability a core part of IMF assessments and financing criteria. This will help countries build resilience and tran- sition to green economies. • POLICY ADVICE AND CONDITIONALITY: One-size-fits-all policy prescrip- tions can harm social outcomes. The reform needed involves tailor- ing advice to local contexts and the BANKING EXECUTIVE 12 ISSUE 201 SEPTEMBER 2025 Comparative Overview of Global Financial Institutions Comparison of the IMF with other major global financial institutions including the World Bank, World Trade Organization (WTO), and Bank for International Settlements (BIS) Institution IMF World Bank WTO BIS Founded 1944 1944 1995 1930 Primary Role Promote global monetary cooperation and financial stability Reduce poverty and support develop- ment in low- and middle-income countries Regulate and facilitate international trade Serve as a bank for central banks and foster monetary and financial stability Focus Area Macroeconomic stability Economic development Trade liberalization Central banking and regulation Key Functions Surveillance of economies: Lend- ing during crises Technical assistance Long-term development loans Infrastructure financing Policy advice Trade negotiations Dispute resolution Trade policy monitoring Research and policy coordination Financial stability monitoring