IMF role should grow in fight against global crisis: Trichet

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FRANKFURT, Nov 22 (AFP): European Central Bank (ECB) president Jean-Claude Trichet called yesterday for the International Monetary Fund (IMF) to play a greater role in resolving the global financial and economic crisis.
Trichet told the Frankfurt European Banking Congress that "the current crisis highlights the fact that the IMF needs to gain more traction as regards the important countries"-those which impact the entire global economy.
"This will not be straightforward but the IMF's multilateral consulations, which foresee a direct exchange between key members of the global economy, represents a process that should be vigorously developed for this purpose," Trichet said.
He said it was important to set up a "well-functioning surveillance framework which identifies imbalances in a timely fashion and encourages the implementation of corrective measures."
Co-panellist Henrique de Campos Meirelles, governor of the central bank of Brazil, agreed the IMF should have increased international supervisory powers but noted there were limits to what such an organisation could do.
"I think the IMF should play a stronger role in that, there is no doubt about it," Meirelles said in reference to issue.
But he added: "I don't think that one multilateral organisation can impose national regulations on countries in general."
The Brazilian central banker suggested that the Bank of International Settlements (BIS), also known as the central bankers' central bank, would gain in prominence through the Basel Committee which is working on tighter criteria for commercial banks, in particular on the level of cash reserves they will need to maintain in the future.
Some commercial banks have found themselves in trouble as risky investments soured, pushing down asset prices and cutting into their capital.
German central bank governor Axel Weber, a member of the ECB governing council, said "there is a comprehensive need for large scale action" and added that it was important for central banks "to focus on regulatory action."