IMF to Conduct “X-Ray of the Entire U.S. Financial System”
June 30th, 2008What becomes of the IMF if this audit is actually carried out? The U.S. has the largest quota of SDRs and largest percentage of votes in the IMF. The whole system would be shown to be the farce that we already know it to be if the most powerful member (and one of the founding members) has its dirty laundry placed on display.
Could this be part of some wider “receivership” plan?
Via: Der Spiegel:
Officials with the International Monetary Fund (IMF) have informed Bernanke about a plan that would have been unheard-of in the past: a general examination of the US financial system. The IMF’s board of directors has ruled that a so-called Financial Sector Assessment Program (FSAP) is to be carried out in the United States. It is nothing less than an X-ray of the entire US financial system.
As part of the assessment, the Fed, the Securities and Exchange Commission (SEC), the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team. They will be required to answer the questions they are asked during interviews. Their databases will be subjected to so-called stress tests — worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar.
Under its bylaws, the IMF is charged with the supervision of the international monetary system. Roughly two-thirds of IMF members — but never the United States — have already endured this painful procedure.
For seven years, US President George W. Bush refused to allow the IMF to conduct its assessment. Even now, he has only given the IMF board his consent under one important condition. The review can begin in Bush’s last year in office, but it may not be completed until he has left the White House. This is bad news for the Fed chairman.
When the final report on the risks of the US financial system is released in 2010 — and it is likely to cause a stir internationally — only one of the people in positions of responsiblity today will still be in office: Ben Bernanke.
More: IMF Finally Knocks on Uncle Sam’s Door
I look foward to speculating on the effects of the report in 2010, which if some of my economic hypothesis are correct, will have a very different impact than if it were released this year. Of course, Bush has to have a similar intuition, even though his hypothesis is likely very different from mine.
The real question: will this X-ray expose the US economy to cancerous radiation?
Kevin,
You never cease to amaze me – the real news that you find out there. I was going to write that IMF did not have jurisdiction – but surprise they do! And not so surprising:
Under its bylaws, the IMF is charged with the supervision of the international monetary system. Roughly two-thirds of IMF members — but never the United States — have already endured this painful procedure.
For seven years, US President George W. Bush refused to allow the IMF to conduct its assessment. Even now, he has only given the IMF board his consent under one important condition. The review can begin in Bush’s last year in office, but it may not be completed until he has left the White House. This is bad news for the Fed chairman.”
Isn’t it amazing? Things we read today on Cryptogon will become “general news” about three or more years from now and all of the sleepwalkers wil blame the next President – most likely Obama for all the woes.
I believe probably the wisest words from Ronald Reagan’s mouth were “the trickle down effect.”
I think he knew that all of his bs economic policies were going to trickle down – but not the way he spoke about them.
Same with GHWBush, Clinton, Bush the Shrub (though the second Bush has no claim to anything economic)
From my experience, friends and family don’t want to know what the results of anything are: the in’s and outs of personal health tests, let alone know about the “health” of the US financial system. The results of my family experience I must extend to the universe. An examination of our financial system – This is almost too much for our country to bear I think, an exposure of our country’s meaningless meanderings into uncharted financial territory.
Did Reagan, Bush I, Clinton, or Bush II pay any price for their financial recklessness? No. And they never will. History is feckless. Last man standing gets the blame. Sigh. Poor Obama.
I however am going to believe that exposure is the best medicine. The disease that has been US US financial policy deserves more than an XRAY! Lets give it a CAT SCAN. Bring it under nuclear examination. US financial policies deserve nothing less than the full “light of day.” I say bring it on. But then. Sure. Not likely to happen. But then, there are always pleasant surprises.