Feibelman, Adam, Law in the Global Order: The IMF and Financial Regulation (April 29, 2017). New York University Journal of International Law and Politics (JILP), Vol. 49, No. 3, 2017. Available at SSRN: https://ssrn.com/abstract=2960643
“It is widely accepted that the framework of international financial regulation does not rely on traditional international legal institutions or arrangements. This conventional account misapprehends the scope of international monetary law and the role of the International Monetary Fund, a treaty-based international institution. It miscasts the Fund as only a monitor of its members’ compliance with agreements forged elsewhere. In fact, although the Fund is largely known for its conditional lending function, it is a regulatory institution charged with enforcing formal obligations of its nearly universal membership, including members’ obligations with regard to their financial policies. The Fund’s primary regulatory role is to conduct bilateral surveillance of its members’ performance of these obligations and multilateral surveillance to “oversee the international monetary system in order to ensure its effective operation.” Surveillance is thus a mode of enforcement, albeit one that relies primarily on persuasion and not on coercive sanctions. By misapprehending this regulatory function, scholars and commentators have underestimated the Fund’s potential impact on its members’ domestic and international financial policies and what that impact may tell us about global governance. This Article relocates the Fund within the framework of international financial regulation and describes its “financial surveillance.” It observes that Fund surveillance has significant impact on its members’ financial policies and proposes that this impact is, at least in part, due to the formal legal basis of its regulatory responsibilities and its members’ obligations.”