International Monetary Fund
International Monetary Fund (IMF) is an organization which monitors the currency and free trade, provides financial assistance, and maintains international financial operations. IMF is committed to promote world finance, strengthen financial stability, and enhance the sustainable development of free trade (Hill, 2013). Nowadays, the global financial is in a critical period, and IMF plays an important role for providing members with loans, monitoring and adjusting international cooperation on currency issues, and regulatory system (Rajan, 2008). IMF for economic governance and reform has been making a great progress and improvement since 2010 (Stijn, & ...view middle of the document...
Secondly, when IMF exercises the functions on the part of strengthen the coordination function of the world monetary and financial disputes, and establish the appropriate coordination mechanism, it usually due to a lack of judicial function in international sovereign debt, and international macroeconomic policy coordination issues into a corner. The IMF governance function is mainly reflected in their ability to punish. If there are no checks and balances, it is likely to cause the occurrence of the direct bilateral political conflict between the Member States on these issues (Rajan, 2008).
Recently, the issue around pessimistic forecasts for Europe's debt crisis said that the euro zone's debt crisis resolution process would keep a long time, and it will be a huge amount of money. This report also indicates that the IMF imbalances within the euro area failed to help them resolving the debt crisis, which led to escalate tension and spread to other countries (Schaefer, 2011). Serious imbalances within the euro area were serious, which would cause a weak global economy. There are a lot of pressures for IMF that hasn’t solved the Eurozone crisis, especially when the crisis has influenced other countries’ economies. The IMF also announced changes in forms of supervision for member states, in order to better grasp the national financial policy and improve the impact on other countries. According to Stijin and Mayhan (2013), the IMF has sparked criticism in evaluating the exchange rate. Therefore, IMF will strengthen supervision in countries’ policies and increase internal policy guidance to countries, because those policies could influence the various effects of global stability (Schaefer, 2011).
Europe's debt crisis continues to spread and still has trouble with the crisis. Regarding China, the IMF contends that the appreciation of the Chinese Yuan is too slow. However, the IMF assessment results met with strong opposition from China. The fund stressed that the appreciation of the Yuan won't make the United States and Europe to be a big winner. According to the IMF's calculations, a 20% rise in the Yuan would make U.S. economic growth around 0.05%, and the euro zone's economic growth rate will be around 0.12% (Schaefer, 2011). Therefore, the IMF suggested that Chinese government should adopt the appreciation of the Yuan to ease inflation and risk of real estate bubble. The appreciation of the Yuan can help to lower oil prices, food prices, and other imported products.
The IMF's report pointed out that the debt crisis might bring European bank up to 300 billion euros debt (Stijin, & Mayhan, 2013). European countries need to adjust the capital structure, and ensure they can afford losses. If Europe's debt crisis has appeared double negative effect, the industry will face cash flow associated with the risk of emerging markets (Stijin, & Mayhan, 2013).
The financial crisis is a result that is generated by accumulating contradictions between...