interests as Diane Coyle reports
Financial markets have a way of imperiously forcing themselves to the top of the agenda, so the behaviour of the currency markets this year will loom large in the discussions of finance ministers and international officials at this week's meetings of the International Monetary Fund and World Bank in the US capital.
Officials see the markets as frenzied; they will sit out the tantrum. Agreement on the lessons of Mexico's shock devaluation and capital flight will be easier. The IMF has drawn up a list of measures to improve surveillance and get early warning of future possible crises.
Kenneth Clarke, the Chancellor, is likely to emphasise the need for developing countries seeking capital to provide better economic information to private investors. The reaction to Mexico's problems was so savage because much information about its reserves and lending figures had not been published.
The IMF will be seeking a "significant" increase in its capital base. It wants to boost its role as the international lender of last resort in financial emergencies by increasing its own reserves - "special drawing rights".
Here, it could run into oppostion. Last week, Hans Tietmeyer, the Bundesbank president, cast doubt on the need for the creation of new SDRs. The Bundesbank sees inflationary dangers in such a boost to the international money supply. An IMF attempt to increase its reserves was defeated at its annual meeting last September.
The third big issue at this week's meetings could turn out to be the thorniest. That is the role of the international organisations in their second half-century. There is, on the face of it, an international consensus on refocusing each organisation on its "core" roles.
The IMF would concentrate on macro-economic policies and international monetary problems. The World Bank would stick to the relief of poverty and long-term economic development. The devil is in the detail, however. The G7 countries, for instance, will resist any IMF encroachment on what they consider their territory - such as exchange rate management. The IMF's recent pronouncements on currencies have not gone down well with G7 countries.
As for the World Bank, reassessing its job in the relief of poverty has prodded the hornet's nest of its relations with UN agencies such as Unctad and the UNHCR. Preliminary discussions with these agencies about how to co-ordinate their crisis relief with longer-term World Bank programmes have made it clear that developing countries will resist change.
The World Bank is dominated by its rich country shareholders. The client countries have a much bigger say in the work of the UN. However, bank officials do expect their new president, investment banker James Wolfensohn, to breathe the winds of change down their corridors.
Apart from slimming the 10,000-strong bank, he is likely to emphasise its role as a consultant with a huge reservoir of technical expertise.
But agreement on this, as on the other items on this week's agenda, will prove difficult - even with the help of Washington's balmy, springtime charms.Reuse content