The venue had been chosen thoughtfully. In a speech delivered in New Delhi, capital of an emerging Asian economic power, Mervyn King, governor of the Bank of England, called for a radical reform of the International Monetary Fund (IMF). In unusually stark terms, King cautioned against letting the IMF slip into obscurity. The institution needed to be modernized and its tasks reconsidered, he argued in February 2006. (1) Since then, several other central bankers, politicians, and academics have contributed to the debate on the future of the Fund. This discussion on the future of the IMF partly reflects the relative calmness in financial markets. The Fund did not have to manage any major financial crisis in recent years, in contrast to the days of the Asian crisis in 1997 or the collapse of the Argentine economy in 2002. But the debate also reflects a deeper concern over the international financial architecture for the twenty-first century. Two unresolved issues cloud the future of the IMF. First, the governance structures of the Fund itself ought to be changed. Today, there is an unsustainable asymmetry: OECD countries shape the IMF's policies, which affect primarily developing countries and newly industrialized economies. Second, the IMF does not provide a convincing safety net for financial crises. If it does not modernize its lending policies, alternative structures of financial governance will continue to be developed. In the absence of a credible institution of global financial governance--providing both crisis prevention and management--governments in countries that have experienced financial crises are developing their own measures, both unilaterally and at the regional level. Consequently, there are many reasons for discussing the future of the International Monetary Fund, the most important being that customers are abandoning the Fund. In contrast to the 1990s, today two important regions have turned away from the IMF. Since a radical restructuring of the Fund--for instance, a considerable strengthening of the voting rights of developing and newly industrializing countries or fundamental changes in the provision of liquidity--is not forthcoming, East Asia and Latin America, each in a very different fashion, are currently developing methods of emancipating themselves from the IMF. The fact that many countries have turned away from the IMF is already reflected in the Fund's balance sheets. In the last fiscal year, new loans granted by the IMF accounted for only US$2.5 billion, the lowest level since the 1970s. The sum of outstanding loans decreased from $90 billion in April 2004 to $66 billion in November 2005 and has since further declined dramatically. Within six months, the governments of Argentina, Brazil, and Indonesia have decided to repay their outstanding debt prematurely--a step that causes trouble for the Fund. Since the Fund finances the cost of its operations from the interest surplus it generates, reduced lending results in a decrease of revenue. According to IMF projections, income from charges and interest payments would shrink from $3.19 billion in 2005 to $1.39 billion in 2006. By 2009, these payments will decrease further to $635 million, about 20 percent of the level in 2005. (2) The IMF's loss of relevance and credibility has three primary causes: First, although the IMF portrays itself as a nonpartisan adviser and banker, it has shown a high level of bias in its work, particularly in the event of a financial crisis. Rodrigo Rato, the IMF's managing director, complained in September 2005 that is held back by politics, ignoring that change itself is politics. (3) When receiving IMF assistance, governments in Asia and Latin America were subject to strict conditionality, which was supposed to guarantee repayments of loans. But the IMF took advantage of financial crises for the implementation of policies that had little, if any, relation to the causes and resolution of the crisis--for instance, the opening of South Korea to foreign investors. …