Truth and Transparency Key to Rebuilding Trust

The International Monetary Fund welcomed calls from the US that it should push for more transparency in global trade and lending, the fund’s boss said.

IMF Managing Director Christine Lagarde said she’s ‘delighted’ that US Treasury Secretary Steve Mnuchin wants her organization to increase transparency on trade imbalances and debt sustainability in countries like China, an effort she said is already underway, CNBC reported.

“It’s clearly a project that we have been working on, that we will continue to work on, and I’m delighted that he’s supporting us,” Lagarde said in a Facebook live interview with CNBC at the IMF Spring Meetings in Washington.

In a statement on Friday from the IMF meetings, US Treasury Secretary Steven Mnuchin urged the IMF to “step up to the plate” to call out countries engaged in unfair trade practices—a frequent refrain from the Trump administration is that its trade penalty threats are not protectionist, but simply seeking ‘fair’ exchange.

Mnuchin additionally proposed the IMF and World Bank should develop an action plan to address growing debt associated with Chinese lending.

Lagarde issued a warning over record-high global debt, which reached $164 trillion according to the IMF’s latest Fiscal Monitor. “We need to really keep our finger on that pulse and make sure that we understand where the liabilities are,” she said. Transparency between governments and institutions is essential for the IMF to achieve its mission of global financial stability, she added.

The IMF chief said that digitalization can help improve transparency and efficiency within governments when it comes to collecting revenue, but she warned digital technologies need to be used for ‘good’. “Digital, to the extent that it cuts out the middle man, to the extent that it brings money to the surface of the transaction, is extremely helpful,” she said.