FXStreet (Delhi) – Research Team at BBH, notes that for five years, governance reforms at the IMF have been stymied by the refusal of the US Congress to accept a new and higher quota (money) to the IMF but the omnibus spending and tax bill that looks likely to be approved by Congress and signed by Obama in the coming days includes a provision to accept the IMF reforms. Key Quotes “When the reforms are enacted, the US weighted voting authority will slip to 16.5% from 16.7%. As many decisions require an 85% majority, the US retains its effective veto. China's voting weight reportedly would rise from 3.8% to 6.0%. As was the case with the SDR decision, the rise of China comes at the expense of Europe, not the US. In exchange for its approval, Congress is demanding a greater role in some IMF decisions. The legislation also would require that the Administration notifies Congress at least a week before an IMF vote is held on "exceptional access". These seem like relatively minor encroachments by the US Congress. The more important consideration is that it begins the long overdue process of modernizing the IMF. One issue that is on few people's radar screens is that Lagarde's term as Managing Director of the IMF ends in July 2016. There had been some speculation that she would enter French politics, where the presidential election will be held in 2017. However, she has indicated a willingness to serve a second terms at the IMF's helm. Lagarde is an adroit politician, and has tried to protect her flanks, but the criticism of the IMF's large exposure to Europe does not set well with many. Arguably more importantly, the European domination of the head of the IMF continues to be questioned. India's Rajan or Mexico's Carstens are thought to be potential rival candidates. However, the challenge is that the emerging and developing countries struggle to unite behind a single candidate, which fragments their voice. Meanwhile the IMF has yet to decide whether it will participate in the third assistance package that was launched this past summer. Ironically, some German officials that opposed IMF involvement at the beginning of the crisis now insist on it. However, the IMF is demanding greater debt relief that many of the creditors seem to be willing to accept. Although the EU heads of state summit begins today, immigration/refugees and the related frontier issues will likely dominate the agenda. A decision also may be made on extending the sanctions on Russia that are set to expire at the end of next month. Debt relief for Greece and the UK's reform demands may be discussed on the margins will likely be more salient early next year.” For more information, read our latest forex news.