CAMBRIDGE: The IMF’s record remains perfect -- five big rescues since mid-1997, five big failures. Brazil was the latest to go off the rails. Last week its currency collapsed and stock market plummeted. This wreck is likely to damage not only Brazil but much of Latin America.

All this was avoidable. The three engineers guiding Brazilian policy - its government, the IMF, and U.S. officials - were negligent. Until the IMF in particular is called to task for its failures everyone risks waking up to financial shocks that undermine living standards in developing countries and threaten global stability.

Bluntly, the IMF has been too solicitous of Wall Street. If you are, say, a U.S. bank with Brazilian investments, you want Brazil to maintain its exchange rate until you get repaid (after that, who cares!). So, you pressure the IMF and the U.S. Treasury to urge Brazil, or Russia, or any other hapless IMF-loan recipient to defend its currency. This gives you time to whisk your money out unscathed before any change in currency values.

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