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http://blogs.reuters.com/columns/2011/05/18/imf-should-use-crisis-to-toughen-itself-up/ DOMINIQUE STRAUSS-KAHN | IMFTHUR May 19, 2011By Martin HutchinsonThe author is a Reuters Breakingviews columnist. The opinions expressed are his Car Electronics own. WASHINGTON The International Monetary Fund has a chance to toughen itself up. Under Dominique Strauss-Kahn, the managing director currently imprisoned in New York after being accused of sexual assault, the IMFs lending has multiplied, largely to basket cases like Greece. But recent loans have failed to force change while damaging other lenders standing.When Strauss-Kahn joined in 2007, the IMFs lending programs had almost atrophied. However, the 2008 financial crisis and the fund bosss activist leanings caused a surge in activity, with loans outstanding rising tenfold to the equivalent of more than $104 billion and the institution garnering the ability to lend far more.The results have been mixed. A smallish loan to Latvia in December 2008 was only partly drawn, and helped the country survive the savage deflation needed to maintain its currencys peg to the euro. Having downsized its government and reduced wage Wholesale Cigar Pipes and Cases rates, Latvias finances are now in decent shape and economic growth has returned.But larger programs that have lacked firm support from the Car Electronics recipient governments have been more problematic. In Ukraine, for instance, the IMF risked playing politics when it first dragged its feet over lending to Yulia Tymoshenkos government, then released funds to Viktor Yanukovich after he defeated Tymoshenko in the January 2010 election.By far the IMFs largest current commitment is roughly $42 billion to Greece, around 13 percent of the countrys GDP, with about half that amount outstanding at present. Unfortunately it has not fixed Greek finances. If Greece eventually restructures its debt, as looks unavoidable at some point, the IMF loans which will end up being senior to other debt will have the effect of reducing what other creditors recover.So Strauss-Kahns expansion of IMF credit has mostly subsidized failure and encouraged moral hazard. The scandal engulfing him presents and opportunity for the organizations member countries to replace the soft DSK with a mean SOB who will lend only on much tougher terms. And if there arent enough deserving Latvias to sustain the IMFs bureaucracy, then maybe it should shrink or even disappear altogether.