U.S. Secretary of the Treasury Janet Yellen recently talked to members of Congress about the Treasury's oversight of the international financial institutions (IFIs).
Yellen's remarks came during a U.S. House of Representatives Committee on Financial Services hearing June 13, according to a Treasury news release.
"Chairman [Patrick] McHenry and Ranking Member [Maxine] Waters: thank you for your invitation to testify before this committee today in my capacity as chair of the National Advisory Council on International Monetary and Financial Policies," Yellen said in the release. "I am looking forward to discussing Treasury’s oversight of the international financial institutions."
Yellen told committee members the importance of IFIs in the nation's larger economic and foreign policy toolset has come into focus during the past few years, the release reported. Since 2020, Americans have felt the impacts of the pandemic, Russia's war on Ukraine and other global shocks.
Yellen pointed out that, when these shocks occur, IFIs support the interests of the U.S. by promoting a more vigorous global economy, according to the release.
"They enable us to mobilize swift responses to mitigate global risks to the U.S. economic outlook," Yellen said in the release. "And they help drive U.S. economic growth by expanding global demand for American products and services. That’s why there has always been a robust bipartisan consensus around strengthening America’s leadership at these global institutions."
Yellen provided the committee with an example of how the organizations have made smart and economical investments to tackle important issues, the release said. She stated, earlier this year, the IMF approved $15 billion for Ukraine, a move that provided direct financial support from the U.S. that will help the nation with the short-term financing it needs.
Ukraine also received necessary financing from the World Bank and other multilateral development banks which makes it easier give out money transparently while promoting economic stability, according to the release.
Yellen noted that, because of America's leadership at these organizations, the U.S. is able to communicate with emerging markets and developing countries, the release reported. In 2022, development banks provided $150 billion in financing for growing countries.
These organizations represent American ideals. Strong guidelines for governance, accountability and debt sustainability accompany IFI assistance, the release said. It acts as a significant check on opaque, unsustainable lending from other countries, notably China.
The multilateral development banks, as an illustration, are a significant source of funding to fill the infrastructure gap in developing nations, according to the release.