WASHINGTON (Sputnik) — On February 4, IMF Managing Director Christine Lagarde said emerging markets around the world do not receive enough support from the international monetary system.
She called for a global policy upgrade to change the status quo, in particular the rules that govern exchange rates, reserves as well as regulations in place that allow countries to access liquidity during times of crisis.
"There is scope for improving the current configuration of the safety net, to enhance the predictability, reliability and speed of insurance and financing mechanisms against shocks, and provide the right incentives for countries to implement sound macroeconomic policies," the report stated on Monday.
The IMF argued that the existing multi-layered financial safety system provides uneven coverage and policy implementation across countries.
"Many of the elements of protection are costly for borrowers — either from a financial perspective (i.e., reserves, commodity hedging) or from a political perspective (i.e., issues of stigma related to access to Fund arrangements)," the report explained.
The IMF noted that many countries continue to lack access to predictable and reliable funding, according to the report.
However, the existing global financial safety net is much larger than before because of the accumulation of reserves and greater access to IMF resources, along with the expansion of bilateral and multilateral arrangements, the report added.