US Congress advances long-delayed IMF reforms

The reforms realign the power of members on the IMF executive board, boosting countries like China and India

The US Congress has agreed after years of delay to endorse key reforms at the IMF that replenish its finances and give a greater say to new economic powers like China.

The ratification of the 2010 reforms is included in a grab-all "omnibus" spending bill that was agreed by the two parties late Tuesday and is expected to pass both chambers of Congress by the end of the week.

With the United States holding by far the largest share of voting rights at the International Monetary Fund, the Congress's refusal to accept the reforms had single-handedly held up their implementation, to the consternation of IMF management and members.

"We take note of the inclusion in the bill of language that would authorize the IMF's 2010 Quota and Governance Reforms by the US Congress. We look forward to the outcome of the legislative process," IMF spokesman Gerry Rice said in a statement.

The reforms both realign the power of members on the IMF executive board, boosting emerging countries like China and India, and double the capital resources the bank uses to support countries in financial crisis.

The IMF had begun weighing a "Plan B" which potentially threatened to erode US influence in a crucial global institution that it has dominated since its creation in 1945.

China, the world's second-largest economy, and other emerging economic giants like Russia, Brazil and India, have deeply disproportionate voting rights at the IMF, which as the global crisis lender has huge influence on the international financial system.

The 2010 reforms would begin to adjust that, even while leaving the United States, Europe and Japan the dominant powers in the body.