MercoPress. South Atlantic News Agency

BoE chair fears “fragmentation of world economy” if Trump abandons IMF and World Bank

“Project 2025” blueprint for Trump's presidency, was authored by figures who are now key White House staff, recommended withdrawal from both institutions

The Governor of the Bank of England Andres Bailey has urged continued US support for two major global economic institutions. According to a piece published by BBC, Mr. Bailey said he was “following extremely closely” whether the Trump administration would change its support for the International Monetary Fund (IMF) and the World Bank.

Sources in Washington said the two institutions were caught by a White House executive order for a review of United Nations (UN) and other international organizations.

Mr Bailey said it is “very important that we don't have a fragmentation of the world economy”.

There is growing concern in finance ministries and central banks around the world about US disengagement from the institutions, with radical changes to the global financial system now being floated in Washington DC.

The “Project 2025” suggested blueprint for Trump's presidency, which was authored by figures who are now key White House staff, recommended withdrawal from both institutions and termination of financial contributions.

It said the institutions “espouse economic theories and policies that are inimical to American principles of free market and limited government principles.”

Following a White House executive order, all international intergovernmental organizations of which the US is a member will be reviewed to determine if they are “contrary to the interests of the US” and “can be reformed”.The six month review may then provide recommendations for withdrawal to President Trump.
Sources in the G20, recalled that during his first term, Trump's team suggested abolishing the IMF at the 2018 Buenos Aires Summit.

The IMF and World Bank are specialized agencies of the UN, and of which the US is the largest shareholder in both institutions, created by the post-war Bretton Woods Conference 80 years ago.

The IMF provides last resort lending for nations in financial trouble, and surveys economic problems, while the World Bank gives money and cheap loans to developing countries for poverty alleviation and development. Some members of the Trump administration are believed to be particularly focused on the World Bank's loans to China.

Asked about the possibility of the US leaving the Fund, the IMF said yesterday it had a “long history” of “working with successive US administrations”.