US Should Back World Bank and IMF, Says Bank of England Chief

The Governor of the Bank of England, Andrew Bailey, has called for the US to continue supporting two key global financial institutions: the International Monetary Fund (IMF) and the World Bank.

Speaking to the BBC, Mr. Bailey said he was “watching closely” to see if the Trump administration would change its stance on these institutions.

Reports from Washington suggest that the IMF and the World Bank are included in a broad review of international organizations, as ordered by the White House. This review covers all global groups where the US is a member, including United Nations (UN) agencies.

Bailey stressed the need for unity in the world economy. He warned against a split in international finance and urged continued US engagement in global financial institutions.

Concerns Over US Disengagement

Many global finance leaders worry that the US might step back from the IMF and the World Bank. Radical ideas for changing the financial system are gaining attention in Washington, raising concerns among finance ministries and central banks worldwide.

A plan called “Project 2025,” created by key White House figures, suggests that the US should withdraw from both the IMF and the World Bank. The document argues that these institutions promote economic ideas that do not align with US principles of free markets and small government.

The White House has ordered a six-month review of all international groups. This review will decide if these institutions harm US interests or if they can be reformed. The results may lead to recommendations for the US to exit certain organizations.

Past Attempts to Cut Ties

Sources within the G20, a group of top global economies, claim that Trump’s team previously suggested shutting down the IMF at the 2018 Buenos Aires Summit. These concerns are resurfacing as the US reviews its role in international finance.

The IMF and the World Bank were created 80 years ago at the Bretton Woods Conference after World War II. They serve different but essential purposes. The IMF provides emergency loans to countries in crisis and analyzes global economic trends. The World Bank funds development projects in poorer nations to reduce poverty and improve infrastructure.

The US holds the most significant stake in both institutions, making its role crucial to their operations. Any move to withdraw could shake the global financial system.

Focus on World Bank Loans to China

The Trump administration has not yet appointed key officials to oversee this area. However, budget cuts under Elon Musk’s Department of Government Efficiency have already targeted USAID, which handles foreign development spending.

Some within the administration are particularly concerned about the World Bank’s financial support to China. This has sparked debates about whether US contributions should continue.

When asked about the possibility of the US leaving the IMF, officials from the organization declined to comment. However, many economic experts believe such a move would have significant global consequences.