‘Ashamed’ economist resigns from IMF

23rd July 2012

In a resignation letter obtained by CNN and addressed to the IMF Executive Board, Peter Doyle, a former senior economist at the fund said "after twenty years of service, I am is ashamed to have had any association with Fund at all."

"This is not solely because of the incompetence that was partly chronicled by the OIA report on surveillance ahead of the Euro Area crisis. More so, it is because the substantive difficulties in these crises, as with others, were identified well in advance but were suppressed here."

Mr Doyle, a former advisor to the IMF's European Department, which runs its programs for Greece, Portugal and Ireland, goes on to say that the failings of IMF surveillance of the financial crisis "are, if anything, becoming more deeply entrenched."

"This fact is most clear in regard to appointments for managing director which, over the past decade, have all-too-evidently been disastrous.

"Even the current incumbent [Christine Lagarde] is tainted, as neither her gender, integrity, or elan can make up for the fundamental illegitimacy of the selection process."

Andrew Walker, the BBC's economics correspondent, argues that even though Doyle's letter is short, the criticism is damaging.

"Perhaps the bigger of the two main charges is that the IMF failed to warn enough about the problems that led to the global financial crises.

"The IMF has had investigations which have, up to a point, made similar criticisms, but not in such inflammatory terms. The IMF did issue some warnings, but the allegation that they were not sustained or timely enough and were actively suppressed raises some very big questions about the IMF's role.

"Then there is the description of the managing director as tainted. It's not personal. It's a familiar attack on a process which always selects a European. It's still striking, though, to hear it from someone so recently on the inside."

Meanwhile, in a blog post written by Hilary Matfess, an intern for the New Economy Working Group at the Institute for Policy Studies, she says Doyle's resignation letter is eerily similar to Greg Smith's famous resignation letter, "Why I am Leaving Goldman Sachs," which was published in the New York Times earlier this year.

According to Matfess, both letters were written by experienced insiders who came to disdain the systemic failures and abuses of their respective institutions.

More important, she writes, is that both of these letters were written with a greater intention than simply giving their authors' two-weeks notice.

"The inventory of flaws in the financial system provided in these resignations is, at least in part, addressed to the American people. Though I can only speak for myself, I hope that Americans are willing to hear these critiques and demand greater governmental oversight for domestic financial institutions and increased transparency and accountability for international financial actors."

"The sub-prime mortgage scandal, the 2008 financial collapse, and the ongoing Libor debacle all reinforce Smith and Doyle's criticisms and should be the rallying point for those who support financial reform."

 

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