Epoch Times spoke to Harvard finance professor and “This Time is Different“ author Carmen Reinhart about China’s role at the International Monetary Fund.
Epoch Times: What do you think about China becoming part of the IMF’s reserve currency basket?
Prof. Reinhart: In the COFER [the composition of foreign exchange holdings], the participating countries report quite a bit of detail. On the profile of their reserve holdings, and of their intervention. That is a step toward transparency which I think is coming at a good time.
Epoch Times: What about an increase in voting rights?
Prof. Reinhart: Well, I think quotas are very dated. If you look at the share of quotas and you compare the share of quotas to the share of world GDP, you see that the quotas are reflecting GDP shares from an earlier era. Not just China, but emerging markets in general expanded their global presence.
Europe, with a lingering crisis and fairly anemic growth by comparison saw its share in world GDP diminish, so right now you still have a significant gulf between quota shares and today’s GDP shares. Just where they are right now I think those quota shares are going to move closer to reality.
