At today’s Financial Services Committee hearing with Treasury Secretary Jack Lew, Ranking Member Maxine Waters (D-CA) lauded the efforts of U.S. Treasury officials and Democratic congressional leaders on the recent ratification of the International Monetary Fund (IMF) quota reform package, after a 5-year delay due to Republican obstruction.
Waters delivered these remarks during today’s hearing on “The State of the International Financial System.”
Thank you, Mr. Chairman. I would like to thank Secretary Lew for coming to testify before us today on the state of the international financial system.
The IMF quota reform package that was adopted, after a 5-year delay, as part of December’s omnibus spending bill, is an important achievement and a positive reflection on the perseverance of U.S Treasury officials and Democratic congressional leaders to get this deal done.
Previously, the failure of the U.S. Congress to approve the IMF quota reform had put the world economy and financial system in serious jeopardy. With ratification now complete, what is essential to U.S. interests is to restore some impetus to ongoing IMF reform and to repair, in part, the damage that has been done to the US reputation for leadership.
The price the Administration paid for the quota reform included a commitment, which it achieved, to seek to eliminate the “Systemic Exemption,” the rule that since 2010 has allowed lending even when there was a risk that the debt was unsustainable, and that was used to support loans for the periphery countries of Europe.
Many believe that the Fund should revert back to its original “exceptional access” rules. I am perfectly fine using such rules as one of many guides for thinking about policy, and I agree that policy should be as transparent and systematic as possible. But I am also sure that, in a complex, ever-changing global economy, policymaking cannot be trusted to a simple instrument rule.
I believe that the Fund should recognize that the problem with rigid predetermined thresholds is that they will inevitably conflict with the unpredictable circumstances of reality -- and that exceptions are going to be inevitable in some cases.
Finally, before closing, I want to take a moment to acknowledge the senseless loss of life caused by brutal and tragic events unfolding in Brussels today. The attacks on the innocent serve as a painful reminder of how important our efforts are in countering the financing of terrorism.
Secretary Lew, I know you are deeply committed to disrupting the networks that finance terror, and I hope you will share more with us today about areas where increased resources or enhanced authorities may assist you in your work.
I look forward to your testimony, Mr. Secretary. I yield back the balance of my time.