WASHINGTON (Reuters) – France’s central bank chief called on Tuesday for preserving the International Monetary Fund and the World Bank, albeit with a narrower focus on matters such as financial stability and payments.
The future of the IMF and World Bank, which hold their spring meetings this week, has been cast in doubt after Donald Trump’s U.S. administration said it would review its memberships of all multilateral institutions.
Francois Villeroy de Galhau said the two Washington-based bodies, which count the United States as their biggest shareholder and are two linchpins of the liberal international order, should continue to exist.
“Let us preserve the multilateral institutions such as the IMF and World Bank, born and hosted in this great country, with more focused ambitions,” Villeroy said in a speech as he headed to the meetings.
The scope of what Villeroy described as “pragmatic multilateralism” was in fact quite wide. It included “financial stability, cross-border payments and crypto-assets, cybersecurity, the fight against financial crime and the prevention of extreme climate events,” he said.
The IMF and World Bank were set up after the end of World War Two to help rebuild and support war-torn economies and ensure their stability in the future.
In more recent years, they’ve mostly lent to poorer countries and increased their focus on issues such as climate change, diversity and inclusion.
Trump administration officials have told the leaders of both institutions to stay in their respective lanes.
In his speech at the Foreign Policy Association in New York City, Villeroy also repeated Banque de France’s estimate that tariffs announced by Trump on April 2 – and since paused – would shave at least 25 basis points off euro zone growth this year.
Villeroy said the impact on inflation was “more uncertain” but he argued “it could be as a whole negative.”
Speaking earlier in Madrid, ECB Vice President Luis de Guindos said tariffs would initially push up inflation before the lower economic activity they generate brings it back down.
(Reporting by Francesco Canepa and Andrea Shalal; Editing by Andrea Ricci)
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