	Introduction

This report provides background information for Congress concerning the International Monetary Fund (IMF, the Fund), the central multilateral organization for international monetary cooperation. The United States is the largest financial contributor to the IMF and congressional interest in IMF activities has increased since the onset of the international financial crisis in 2008. IMF lending has surged during the past decade, including large loans to Greece, Ireland, and Portugal. It was the shared view among the allied powers that many characteristics of the international financial system during the period between the first and second world wars, including competitive devaluations, unstable exchange rates, and protectionist trade policies, worsened the 1930s depression and accelerated the onset of the war. Unique among the founding members, the United States, in the Bretton Woods Act, requires specific congressional authorization to change the U.S. quota or "shares" in the Fund or for the United States to vote to amend the Articles of Agreement of the IMF or the World Bank. The U.S. Congress, thus, has veto power over major decisions at both institutions. The Bretton Woods Monetary System

From 1946 to 1971, the main purpose of the IMF was regulatory, ensuring IMF members' compliance with a par value exchange rate system. This was a two-tiered currency regime using gold and the U.S. dollar. From 1973 to the Present

A major purpose of the IMF as originally conceived at Bretton Woods—to maintain fixed exchange rates—was, thus, at an end. The IMF also increasingly relied on its lending powers, as floating exchange rates and the growth of international capital flows led to more frequent and increasingly severe financial crises. Over the past several decades, the IMF has been involved in the oil crisis of the 1970s; the Latin American debt crisis of the 1980s; the transition to market-oriented economies following the collapse of communism; currency crises in East Asia, South America, and Russia; and, most recently, the global response to the 2008-2009 global financial crisis and the multiyear European sovereign debt crisis that began in 2010. Functions of the IMF

As set forth in its Articles of Agreement, the purposes of the IMF are (1) to promote international cooperation on international monetary problems, (2) to facilitate the expansion and balanced growth of international trade, promoting high levels of employment and real income and the development of productive resources in all member countries, (3) to promote exchange rate stability and to avoid competitive exchange rate depreciation, (4) to help establish a multilateral system of payments among countries for current transactions and to help eliminate foreign exchange restrictions which hamper world trade, (5) to make loans to member countries on a temporary basis with adequate safeguards for repayment, "thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity," and (6) to shorten with such loans the duration and to lessen the degree of disequilibrium in the international balances of payments of members. These are available through its publications page, also available at the IMF website. Concessional lending to low-income countries is resourced through contributions from member countries and the IMF itself, rather than through quota subscriptions. In 2009, following the financial crisis, the IMF created the Flexible Credit Line (FCL). Governor at the IMF. Outlook: The IMF and the Global Financial Safety Net

Increased attention to the IMF since the financial crisis has revived long-standing debates about the institution's role in the global economy and the future of U.S. support for the institution.
The International Monetary Fund (IMF), conceived at the Bretton Woods conference in July 1944, is the multilateral organization focused on the international monetary system. Created in 1946 with 46 members, it has grown to include 189 countries. The IMF has six purposes that are outlined in Article I of the IMF Articles of Agreement: promoting international monetary cooperation; expanding the balanced growth of international trade; facilitating exchange rate stability; eliminating restrictions on the international flow of capital; ensuring confidence by making the general resources of the Fund temporarily available to members; and adjusting balance-of-payments imbalances in an orderly manner.
Congressional interest in IMF activities has increased since the onset of the international financial crisis in 2008. IMF lending has surged in the past decade, particularly in light of large loans to Greece, Ireland, and Portugal. In 2009, major economies agreed to substantially increase the IMF's resources and to move forward on several major reforms at the institution. These include increasing the voting share of emerging economies; revamping the IMF's lending toolkit to introduce greater flexibility and create new facilities for low-income countries; and creating a road map for resolving the fast-growing economic imbalances in the global economy between surplus and deficit countries. In late 2010, IMF members agreed to a doubling of IMF quotas, which required congressional authorization and appropriations.
The United States was instrumental in creating the IMF and is its largest financial contributor. Since voting shares are based on financial contributions, the large U.S. voting share provides the United States veto power over major decisions at the IMF. Both the IMF and its sister organization, the World Bank, are headquartered in Washington, DC.
At the Bretton Woods conference, the IMF was tasked with coordinating the system of fixed exchange rates to help the international economy recover from two world wars and the instability in the interwar period caused by competitive devaluations and protectionist trade policies. From 1946 until 1973, the IMF managed the "par value adjustable peg" system. The U.S. dollar was fixed to gold at $35 per ounce, and all other member countries' currencies were fixed to the dollar at different rates. This system of fixed rates ended in 1973 when the United States removed itself from the gold standard.
The IMF has evolved significantly as an institution since it was created. Floating exchange rates and more open capital markets in the 1990s created a new role for the IMF—the resolution of frequent and volatile international financial crises. The Asian financial crisis of 1997-1998 and subsequent crises in Russia and Latin America revealed many weaknesses of the world monetary system, which have only become more apparent in the wake of the 2008-2009 global financial crisis and the more recent sovereign debt crises in Europe.
This report evaluates the purpose, membership, financing, and focus of the IMF's activities. It also discusses the role of Congress in shaping U.S. policy at the IMF.