Introducing Financial Accountability at the IBRD:

1
Multilateral Development Banks Statutory
Obligation to Grant Debt Relief
IBRDs Articles of Agreement Art. IV.6 special
reserve to provide for what Art,IV.7 calls
Methods of Meeting Liabilities of the Bank in
Case of Defaults.
Art. IV.7 OBLIGATION to reduce claims in case
of default
Art.IV.4.c relaxation of the conditions of
payment
III.4.vii loans shall, except in special
circumstances, be for the purpose of specific
projects (literally also in IDAs Art. V.1.b)
Other MDBs similar statutory obligations
2
IMF Violating its Own Statutes
Article VI(3) gives members the right to
exercise such controls as are necessary to
regulate international capital movements except
in a manner which will restrict payments for
current transactions.
Article XXX.d defines current transactions not
for the purpose of transferring capital,
including payments of moderate amount of
amortization of loans or for depreciation of
direct investments or moderate remittances for
family living expenses
Article VI.1.a member may not use the Funds
general resources to meet a large and sustained
outflow of capital and the Fund may request a
member to exercise controls to prevent such use
of the general resources of the Fund.
3
Introducing Financial Accountability
Projects Permanent International Court (of
Arbitration)
IBRD Art. VII.3 allows actions against Bank
(except by members) "immune from all forms of
seizure, attachment or execution before the
delivery of final judgment
Specifically for Members Any controversy
between the parties , and any claim by any such
party against any other such party ... submitted
to arbitration by an arbitral tribunal General
Conditions for Loans, Section 8.04
IMF Art. IX.3 totally immune but may waive
immunity
4
Introducing Financial Accountability
Programmes Raffer Proposal equal/symmetrical
treatment of all creditors FAIRNESS to private
sector lenders debtors!

• One might well wish to know
• IFIs are NOT preferred creditors and they know
  it

www.imf.org/external/pubs/ft/history/2001/ch16.pdf
J. M. Boughton (2001) Silent Revolution The
International Monetary Fund 1979-1989 (Washington
DC IMF) pp.820f
All IFIs have provisioned defaults already paid
for