An International Monetary Fund economist who said he is leaving the institution wrote that he is “ashamed” of being associated with it and criticized it for what he said was a failure to send warnings about the global financial crisis and the European debt turmoil.
“The consequences include suffering -- and risk of worse to come -- for many including Greece, that the second global reserve currency is on the brink, and that the fund for the past two years has been playing catch-up and reactive roles in the last-ditch efforts to save it,” according to the letter written by Peter Doyle, who worked as a division chief in the European department.
The letter, dated June 18, was addressed to the senior member of the IMF board, Shakour Shaalan, as well as to IMF and government officials and Bank of Israel Governor Stanley Fischer. It was first reported by CNN, whose website linked to a copy of the letter. The document’s authenticity was confirmed to Bloomberg by IMF spokesman William Murray.
Doyle, who worked in a division overseeing Denmark, Sweden and Israel, said weaknesses in the fund’s monitoring mission have become more entrenched, including during the period of a little more than a year during which Christine Lagarde has been managing director. Lagarde, a former French finance minister, is “tainted” because the process to select her was not legitimate, Doyle said.
Murray, the IMF spokesman, said in an e-mail that Doyle’s remarks on surveillance failures “are well documented in the public record, including reports issued by the Independent Evaluation Office, via the Triennial Review of Surveillance, and in many statements by the Managing Director, including on the findings in these various reports.”
The IMF has been trying to strengthen monitoring of its member countries after being criticized for failing to detect signs that led to the 2008 financial crisis. It is now co-financing three bailouts in countries using the euro and last month obtained $456 billion in new resources to help protect the world from Europe’s turmoil.
Doyle, who wrote that he had 20 years of service, said the factors that led to weaknesses in surveillance include “analytical risk aversion, bilateral priority, and European bias.”