Whatever is the IMF to do about the US?

The IMF’s meeting this spring was lauded as a breakthrough, with officials given a new mandate for "surveillance" of the trade imbalances that contribute significantly to global instability. The new mission is crucially important, both for the health of the global economy and the IMF’s own legitimacy. But is the fund up to the job? There is obviously something peculiar about a global financial system in which the richest country in the world, the US, borrows more than US$2 billion a day from poorer countries — even as it lectures them on principles of good governance and fiscal responsibility. So the stakes for the IMF, which is charged with ensuring global financial stability, are high: If other countries eventually lose confidence in an increasingly indebted US, the potential disturbances in the world’s financial markets would be massive.