Some critics of the IMF, for example, argue that because the system of fixed exchange rates that the Fund was created primarily to support has collapsed, so should the Fund. Indeed, some assert that the Fund's role as emergency lender to all countries has encouraged imprudent behavior by governments, borrowers, and lenders. Abolishing the IMF, they argue, would make all parties behave more carefully, with fewer financial crises as a result. IMF loans have not bailed out foreign holders of bonds or equities in emerging markets. But abolishing the Fund to address this problem runs enormous risks.
World leaders are right to avoid such a risk on a global scale.
U.S. opponents of the WTO claim that subjecting U.S. regulations and standards to an international trade-oriented dispute resolution process risks watering down or even eliminating them. But WTO dispute resolution panels decide whether a country's rules unfairly discriminate against foreign goods, not whether the rules are unsound. Indeed, under recently enacted legislation, the IMF must now report on how well its borrowers are advancing labor and environmental standards. The history of developed countries suggests that standards will rise as average incomes grow and citizens demand improved labor and environmental protections. Because trade is a well-documented means for countries to improve their living standards, it would be counterproductive to deny emergency financing or market access to countries that may not adhere to some minimum standards.