This paper assesses empirically the effectiveness of the IMF as a component of the Global Financial Safety Net by running a panel regression on a sample of emerging market countries' sovereign spreads. In particular, we check if the size of the Fund's lending capacity and the introduction of the new precautionary facilities play a role in explaining emerging market countries' spreads, after controlling for the traditional determinants of the spreads reported in the literature. From a policy perspective, the empirical evidence presented in this paper can provide a basis for assessing the potential gains from a stronger role of the IMF and of the GFSN in general, an important issue in the current international debate. We find that what appears to matter most are the overall resources available for lending by the IMF, rather than the channels through which such resources can be accessed by members.

In April 2008 the International Monetary Fund approved a resolution which modified its quotas and voting power . The goal was to realign, at least in part, the voting power of IMF member countries with their relative weight and role in the world economy, while ensuring better representation for the poorest ones. This paper guides the reader through the complicated process that led to the final outcome, exploring both the technical aspects of the reform and the underlying political motivations. In particular, we discuss the functions of IMF quotas and their evolution in an historical perspective. We talk about the inadequacy of the former distribution of voting power and, therefore, the need for the reform. We also analyze several technical aspects debated during the negotiations. Finally, we assess the effectiveness of the resolution in achieving the proposed goals. We conclude that the approved outcome represents a first step in the right direction. Nevertheless, some issues remain unresolved and will need to be addressed in the future.

This paper studies the sudden stop in capital flows that emerging markets experienced throughout the first months of the pandemic. First, we find that the sudden stop in capital flows was strongly affected by lower portfolio investments by non-bank financial intermediaries: for many emerging markets, the magnitude of the sudden stop exceeded that of the Global Financial Crisis. Second, we show that emerging markets adopted expansionary fiscal and monetary policies to deal with the sudden stop and the resultant recession; moreover, the use of macroprudential measures and unconventional monetary policy are part of a wider policy toolkit, compared with other crises. Third, we estimate the adequacy of current IMF resources if emerging markets were hit by a systemic sudden stop. We find that the IMF's resources are adequate in the event of a moderate sudden stop; in the event of a more severe scenario, the financing needs of emerging markets could go beyond the IMF's lending capacity, even after the other layers of the global financial safety net have been deployed.

This paper studies the sudden stop in capital flows that emerging markets experienced throughout the first months of the pandemic. First, we find that the sudden stop in capital flows was strongly affected by lower portfolio investments by non-bank financial intermediaries: for many emerging markets, the magnitude of the sudden stop exceeded that of the Global Financial Crisis. Second, we show that emerging markets adopted expansionary fiscal and monetary policies to deal with the sudden stop and the resultant recession; moreover, the use of macroprudential measures and unconventional monetary policy are part of a wider policy toolkit, compared with other crises. Third, we estimate the adequacy of current IMF resources if emerging markets were hit by a systemic sudden stop. We find that the IMF's resources are adequate in the event of a moderate sudden stop; in the event of a more severe scenario, the financing needs of emerging markets could go beyond the IMF's lending capacity, even after the other layers of the global financial safety net have been deployed.