Who is going to clean up the inevitable financial mess in emerging markets if persistent inflation forces the US Federal Reserve to start raising interest rates significantly? The International Monetary Fund, normally tasked with pulling countries back from the brink, seems disenchanted with the job. Rather than embracing its traditional role of helping troubled debtor countries help themselves, the IMF has been attempting to morph into an aid agency.

Of course, it is more fun to be Santa than Scrooge, and rich countries give far too little in foreign aid. I have long advocated establishing a world carbon bank to channel grants and technology. Likewise, the case for funding a restructured World Health Organisation to fight pandemics is compelling. But in a world where private capital flows far outweigh official lending, traditional IMF programs still have a critical role to play in mitigating and managing financial crises.