The United States needs to have a greater leadership role in the International Monetary Fund (IMF) and other international financial institutions to support impoverished countries and limit China’s influence, says Treasury Secretary Janet Yellen.
Yellen appeared before the House Financial Services Committee, defending a proposal to bolster the government’s participation in the IMF’s New Arrangements to Borrow program to ensure financial support for the organization’s resources. Yellen also requested authorization to extend financing to the IMF’s two critical trust funds—the Poverty Reduction and Growth Trust and the Resilience and Sustainability Trust—and bolster U.S. involvement in the African Development Fund and the International Development Bank.
“These actions will help the IMF address economic crises, with a particular emphasis on supporting vulnerable developing countries amid heightened risks,” she said in her prepared testimony. “These investments will bolster our engagement in these regions at a time of geopolitical competition.”
The former head of the Federal Reserve noted that the United States “is not a passive shareholder” and regularly shapes “the priorities of these institutions.” She added that lending to international financial entities can function “as an important counterweight to nontransparent, unsustainable lending from China.”