On June 14, nearly 50 Senate staffers, Committee members, and friends gathered for an introductory briefing on the international financial institutions (IFIs). Much like our event for the House in March of 2013, the Committee welcomed distinguished speakers from the Inter-American Development Bank, World Bank and the International Monetary Fund for a briefing at the U.S. Senate.

Led by Committee Co-Chair and former U.S. Representative Bill Frenzel (R-MN) and Committee Member Bill Frymoyer, the seminar centered on the specific roles of the IFIs and why they are crucial to the stability of the global economy and U.S. interests.

First, Julie Katzman, Executive Vice President and COO of the Inter-American Development Bank (IDB), highlighted some of the specific projects in which the IDB is involved, such as increasing access to bus and public transit systems in Colombia, electricity connectivity in Guatemala, and school attendance in Mexico. Ms. Katzman explained how the IDB focuses on reducing risk in their operations, increasing accountability, and reaching the poorest nations first. She also outlined the importance of Latin America as a trading partner, considering that the United States participates in three times as much trade with Latin America than with China, and how IDB-supported efforts promote strong financial systems to help the region weather the recent financial crisis.

Next, Craig Albright, Special Representative for North America at the World Bank Group, described the two current emphases of the Bank’s work: eliminating extreme poverty by 2030 and boosting shared prosperity. He explained how the Bank’s support for fragile and low-income states, promotion of anti-corruption standards, and engagement with the private sector “brings all the tools together to solve tough problems.” Mr. Albright also stressed how the U.S. can continue to influence the manner in which Bank achieves these goals through its active participation.

Whitney Debevoise, Senior Partner at Arnold and Porter, then reminded the audience that there is a “huge return on investments” from the leverage created by U.S. investment in the World Bank Group: for every one dollar the United States contributes, IFIs can leverage $25-30. From his time as U.S. Executive Director to the Bank, he shared specific examples of policy changes, which helped the Bank adapt to address today’s challenges, such as the creation of the Climate Investment Funds. He also stressed that - by working through the World Bank – the United States helps to create more stable markets globally, and that stable markets thus lead to improved national security.

Panelists then responded to questions from the audience, providing further detail on how the different IFIs are financed and managed.

The discussion then moved to explore the work of the International Monetary Fund (IMF).

Rhoda Weeks-Brown, Deputy Director of the IMF’s Communications Department, joined Mr. Debevoise to provide an overview of the surveillance, technical assistance, and lending activities of the Fund. Ms. Weeks-Brown placed these core functions in the context of the current state of the global economic recovery, which described she as having “three-speeds:” first, recovery and rapid growth, mainly occurring in Sub-Saharan Africa and other parts of the developing world; the second speed includes the U.S., Canada, and Sweden, which are “on the mend” and experiencing positive, though slow, growth; finally, the third speed is composed of countries experiencing negative economic growth such as Italy and Spain. She predicted that the world will likely take 10 years to recover from the 2008 world economic crisis, but emphasized the key role of the Fund in promoting global and national economic stability to facilitate a recovery.

Mr. Debevoise explained how the relationship between advanced and emerging economies is shifting and spoke about the need to adjust the governance systems at the IMF and other IFIs to reflect this changing landscape. He encouraged the U.S. Congress to move forward on the Administration’s request to reduce U.S. lending to the IMF under the New Arrangements to Borrow and increase the U.S. quota as a way to maintain U.S. in the Fund.

As part of its ongoing efforts to demonstrate the value of U.S. leadership through the IFIs, the Committee plans to host Congressional educational/briefing events annually.

The Committee would like to thank the Senate Banking Committee, Senator Mark Warner, and their staffs, program moderator and Committee Co-Chair Bill Frenzel, the Committee’s legislative task force co-lead Bill Frymoyer, and the External Relations Teams at the IMF, World Bank, IDB, and Asian Development Bank for their help with this event.