By Saleha Mohsin, Eric Martin, and Bloomberg
September 28, 2021 12:31 PM GMT+7
Treasury
Secretary Janet Yellen has declined to return calls from the beleaguered head
of the International Monetary Fund, Kristalina Georgieva, since a scandal
broke, indicating that the Biden administration’s withholding of support for
her goes beyond its public statements. Since
Georgieva was accused earlier
this month of improperly intervening in a World Bank report in her prior job
there, she has made attempts to speak with Yellen but has failed to get
through, people familiar with the matter said, speaking on the condition of
anonymity. The report from law firm WilmerHale, commissioned by the World Bank,
alleged that Georgieva—who took the helm of the IMF in 2019—pressured bank
staff to boost China’s business-climate rating. Georgieva
previously had easy access to Yellen, the people said, given the close nature
of multilateral engagement between the IMF and the Treasury. The pair spoke
regularly earlier this year, Yellen’s calendars indicate, as the U.S. and IMF
worked on initiatives including the fund’s planned $650 billion global reserves
injection. The
U.S. is the largest shareholder in both the IMF and World Bank, and the
Treasury Department manages those relationships. U.S.
Treasury spokeswoman Alexandra LaManna declined to comment on Yellen’s recent
contact with Georgieva. An IMF spokesperson also declined to comment, as did a
spokesperson for Georgieva. “The
credibility of the IMF is clearly being damaged,” said Timothy Ash, a
strategist at BlueBay Asset Management in London and a veteran analyst of
emerging markets. He said Georgieva should step aside until the investigations
are complete. A
Treasury official said the department has reviewed the allegations of improper
conduct and finds them to be concerning and serious. The department is awaiting
the IMF’s own assessment, the person said, speaking on the condition of
anonymity. The
IMF ethics committee is currently reviewing the findings of the World
Bank-commissioned report. “As
we have made clear, Treasury believes the report’s findings are serious and
have warranted a full review by the IMF of the managing director’s role in the
Doing Business Report,” Treasury’s LaManna said, reiterating a statement made
earlier this month. “Our primary responsibility is to uphold the
integrity of international financial institutions.” Signature Gatherings The
lack of communication comes in the run-up to the IMF and World Bank annual
meetings, being held Oct. 11-17. Those are signature gatherings for the two
Washington-based institutions, and bring together finance ministers and central
bank chiefs from around the world. Members
of both parties are voicing concerns about Georgieva. While several Republican
lawmakers called for Treasury to probe
the allegations, two prominent Democrats—House Financial Services Committee
Chair Maxine Waters and Senate Foreign Relations Committee Chair Robert
Menendez have also called the allegations troubling. Georgieva
has rejected allegations of meddling in the World Bank’s “Doing Business”
ratings index for China. The report, which the World Bank discontinued by after
ethics issues were found with its preparation, was used by investors—and often
touted by governments—as a gauge of competitiveness. In
a three-page letter to the head of the IMF board’s ethics committee dated Sept.
21, Georgieva said she was surprised by law firm WilmerHale’s conclusion in
a Sept.
15 report that
she played a “key role” in changes related to China’s ranking in the 2018
report. “This
is simply untrue,” Georgieva wrote. Georgieva
has received
support from
other quarters, including from former World Bank chief economist and Nobel
laureate Joe Stiglitz. The
IMF has pledged a “thorough, objective, and timely review” of the allegations
against Georgieva. Last week, after the WilmerHale audit was released,
Georgieva said she disagreed with the findings and told fund staff at a town
hall that she asked staff to double-check or triple-check data, but never
change its ultimate message.
No comments:
Post a Comment