The IMF and capital account crises: the case for a separate lender of last resort and conditionality functions

What has happened to the push for reform of the international financial architecture that had such momentum during the rash of international financial crises in the 1990s?1 While not the stuff of dramatic news headlines, a great deal of progress has been made, especially in the areas of increased transparency at the IMF and the growing acknowledgment of the danger of trying to run a stickily pegged exchange rate regime in a world of substantial international capital mobility. Less progress has been made, however, in dealing with another implication of high capital mobility – the need for the IMF (or some other international agent) to have more effective capability to act as a quasi international lender of last resort (ILOLR).2