Video: The IMF’s Leverage Issue

Dev-KarA timely interview with Dev Kar, lead economist at Global Financial Integrity on why the International Monetary Fund’s ratings aren’t always trustworthy (click the image to view it). Kar was a speaker at this year’s Global Investment Conference. In this interview, he points out that the IMF’s main problem is leverage (or, more accurately, lack of leverage) when it comes to pressing some countries for accurate financial data. Put simply: if a country doesn’t borrow from the IMF, it’s hard to push for sound statistics. Which is exactly what happened in the case of Greece – and possibly other countries. The big message: the sovereign debt crisis could easily happen unless organizations like Eurostat and the IMF overhaul their approach to data gathering (or investors stop relying on them altogether…).