ABSTRACT
An important component of the debate about a new international financial architecture involves the International Monetary Fund's (IMF) relationship with private capital markets. Traditionally the IMF has avoided direct interactions with these markets, preferring instead to influence private capital flows to developing countries and countries in transition indirectly via its conditionality and its own lending operations. However, there have been instances in the past when a more direct and coercive approach has been taken by the Fund in an attempt to ensure that private flows to developing countries were maintained. In this chapter we consider a third approach to the problem of ensuring adequate financing for developing and transition countries: should the IMF directly borrow from private markets to finance at least a proportion of an expanded lending role?
