Governor of the Bank of England, Andrew Bailey, has called for continued support for the International Monetary Fund (IMF) and the World Bank from the US. Bailey has voiced concerns following the signing of a White House executive order calling for the review of the United Nations and other international institutions. The order applies to all intergovernmental organisations, including the IMF and the World Bank. Bailey said continued support for the organisations is essential to avoid fragmentation of the world economy.
Bailey’s comments reflect the increasing concern within the financial sector, as there is much speculation over whether Trump will withdraw US support for these organisations. The emboldening of “Project 2025,” a blueprint authored by current White House staff members with recommendations for changes to the global financial system, has only added to alarm. Per the blueprint, the US would withdraw from both the IMF and World Bank, citing policy incongruence with American principles.
The IMF and World Bank are both UN-specialised agencies created 80 years ago by the Bretton Woods Conference after the second world war. The IMF provides last resort lending to nations while also surveying economic problems, whereas the World Bank is focused on providing developing countries with money and affordable loans to fight poverty. The US is the largest shareholder in both organisations. Following the latest Executive Order, all US-member organisations will undergo a six month review to identify areas “contrary to the interests of the US.”
USAID’s development spending has recently become a focal point of Elon Musk’s Department of Government Efficiency cuts. Though the Trump administration is yet to appoint staff to this area, central to US engagement with the IMF and the World Bank is the concern around World Bank loans to China. Despite fears, the IMF has stated that it has a “long history” of “working with successive US administrations” in response to concerns over the US withdrawal.
Read the full article from The BBC here: Read More
