Economy

IMF voting quotas revision to favor emerging economies proposed by France’s central bank chief


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France’s central bank chief, Francois Villeroy de Galhau called for a revision of the International Monetary Fund (IMF) voting quotas, favoring emerging economies such as China. However, he stipulated that such changes should occur only if these countries adhere to the rules of the global multilateral system. The outdated quota distribution is anticipated to be a contentious issue at the upcoming World Bank and IMF meeting in Marrakesh.

Villeroy was critical of China’s separate bilateral debt deal with Sri Lanka, in contrast to the US’s proposal for an equal increase in quotas without redistributing voting shares. His remarks were made at the Emerging Markets Forum, where he suggested that future IMF reforms could form European groupings behind board seats and modify majority voting rules to lessen veto power.

The French central bank chief emphasized the importance of emerging economies in climate change financing. He also expressed skepticism about the declining dominance of the US dollar due to China’s promotion of the yuan as a reserve currency.

Villeroy raised concerns about fading trust in international fora like the IMF and multilateral development banks. He called for unquestionable fairness in the governance of international financial institutions and advocated for a more equitable representation for emerging and developing countries.

He cautioned against a shift from a dollar-dominated system to a confrontational non-system, predicting that such fragmentation could lead to instability and inefficiency. The central banker’s comments underscore the ongoing debate over global economic governance, particularly as it pertains to the roles of emerging economies and their influence within international financial institutions.

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