How do you transform the International Monetary Fund, an institution until recently widely criticised for its lack of legitimacy and representativeness, on the verge of irrelevance, into the international community’s premier tool for fighting the global crisis?

Simply by throwing the full support of world leaders behind it.

How do we ensure that this unprecedented support and co-ordination at the international level does not evaporate once the crisis is over? By transforming bodies such as the Group of 20 and Group of Eight leading nations into a global economic council (Gleco). This new international body should oversee the proper functioning of the global economy and the stability of the international financial system by providing close political support and strategic guidance to all international financial institutions.

The worst economic crisis of the past 70 years has convinced even the most sceptical critics of the wisdom of having an international “fire brigade” such as the IMF with the tools and expertise to co-ordinate global economic policies and assist countries in financial distress. However, as the recent experience has demonstrated, effective policy co-ordination at the international level is possible only with the direct involvement of the world’s leaders.

Efforts to address the root causes of the financial turmoil and combat the global recession are much more effective if co-ordinated across countries. In future, a high degree of international co-operation will be even more crucial for achieving meaningful reform of financial markets and for devising effective exit strategies after the crisis. Addressing these issues in a desultory way, with a fragmented array of decision-making bodies with overlapping responsibilities is not the best way to proceed.

Most reform proposals have focused on the IMF rather than on the broader issue of the entire Bretton Woods system. This is not surprising, but not satisfactory. The IMF has been able to discharge its responsibilities during the crisis quite efficiently. To the extent that changes are needed urgently, they should ensure that the activities of the Fund are fully backed by world political leaders; however, this is an issue that concerns the governance of all international financial institutions, not just the IMF. Broader reform could be achieved by creating a ministerial body with decision-making powers not inside but above the Fund. It would also be responsible for political supervision of the other international institutions, including the World Bank, the Financial Stability Board, and the World Trade Organisation.

This Gleco would supersede the G20 and G8 as the governing body of the global economy. Contrary to the selectivity of those groups, the Gleco would have universal representation as at the IMF and World Bank. Gleco’s membership should be at the most senior political level, with finance ministers gathering two to three times a year and heads of government meeting once a year. Since the Gleco will stand above the other institutions, there is no need to alter their internal governance.

The main role of the Gleco would be to provide strategic guidance and high level political support to the activities of the other institutions. This is of particular importance for the Fund. It is inconceivable that having entrusted the Fund with vastly increased financial resources and new responsibilities, world leaders would not want a substantial degree of control. Also, the Fund will only be able to discharge effectively its new tasks with the close support of the political authorities; this is certainly so for the development of the early warning exercise and exit strategies. So too for the enhanced surveillance of domestic policies to ensure sustainable growth.

The establishment of Gleco would also address the need to update the rules and institutions of Bretton Woods. Instead of continuing with the current approach of ad hoc solutions to specific problems, Gleco could launch an international conference to tackle in a systematic way all these issues. Half a century after the establishment of the Bretton Woods system it is time to devise a new architecture for the global economic order geared to the challenges of the 21st century.

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Adams is a member of the Atlantic Council Business and Economics Advisors Group and Board of Directors.  He is managing partner of the Lindsey Group and a former Under Secretary of Treasury for International Affairs.  Sadun is a member of the IMF executive board.  Both of their views are their own.  This essay was previously published as “Global economic council should oversee all” in the Financial Times.