NEWS from Subcommittee Chairman
Michael N. Castle (R-DE)
Committee on Banking and Financial Services
Subcommittee on Domestic and International Monetary Policy
|FOR IMMEDIATE RELEASE
January 30, 1998
|Contact: Ron Bonjean
CASTLE CALLS FOR SUBSTANTIAL IMF REFORMS IN LIGHT OF ASIAN FINANCIAL CRISIS
(Washington, DC) -- Congressman Michael N. Castle, chairman of the House Subcommittee on Domestic and International Monetary Policy, today stated before the House Banking Committee hearing on the ongoing Asian financial crisis and the examination of the International Monetary Fund (IMF) response that Congress should not authorize additional funding for the IMF unless sufficient reforms are implemented to strengthen the organization.
Congressman Castle told hearing witnesses U.S. Treasury Secretary Robert Rubin and Federal Reserve Chairman Alan Greenspan that the American taxpayers are being asked to rescue foreign economies and some domestic investors from the logical consequences of ill-considered policies and imprudent loans. "In effect, we are going to be asked to intervene in the marketplace and alleviate the severe sanctions it imposes on foolishness and greed," Castle said. "I accept that the worlds economies are increasingly interconnected, and my instinct is to support our international commitments because they are generally in our national interest. Having said that, it does not mean that we have to accept being passively manipulated by events and simply pony up every time nations around the world come to economic grief and need bailing out."
Congressman Castle believes that todays financial crisis presents Congress with an opportunity to exert substantial leverage to insist upon real reforms that would help protect the IMF from a repetition of the current situation in a few more years. "My support will be contingent upon an acceptable plan of reformation of international financial crisis management. Clearly, a mere statement that there is a crisis will not be convincing enough to sway this Congress to come to the rescue."
A first step towards strengthening the IMF and protecting the U.S. taxpayer can be found in H.R. 3114, the IMF Reform and Reauthorization Act of 1998. The provisions contained within the bill is a starting point towards encouraging recipient countries to originate market-orientated reforms, adopting sound banking practices, reducing opportunities for corruption and bribery, supporting workers rights and reducing ethnic strife and promoting environmental protection.
Congressman Castle said that as the chairman of the House Subcommittee on Domestic and International Monetary Policy, he will look to strengthen H.R. 3114 when it comes before his subcommittee for consideration. "Unless we are going to endorse the wholesale defrauding of investors, the reforms demanded in H.R. 3114 should be a minimum requirement for any authorization of the IMF funding by this Congress."
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