The IMF and the world: Unsteady as she goes
If you knew nothing of what had happened in the global economy over the past five years you would have found Christine Lagarde's opening press conference at the World Bank and IMF meetings in Tokyo on Thursday morning distinctly peculiar.
Why? Because she was saying some quite scary things about the outlook for the world, but she didn't sound like she wanted to raise the alarm. She sounded like it was pretty much business as usual.
A good example was financial sector reform, which came top of her list of policy priorities for governments. She said: "if you ask... supervisors around the world whether the financial sector is safer than it was five years ago, many will say: 'no, not yet'. And we tend to concur with that."
When you think about it, that's quite alarming. After all, five years ago the financial sector turned out to be less safe than it has been since at least the 1920s, maybe ever.
Since then, trillions of dollars have been ploughed into the global financial system and thousands of pages of new regulations and supervisory requirements have been drawn up to make the financial system stronger.
But Madame Managing Director is saying that the Fund doesn't think we're any safer than we were five years ago. And nor, apparently, do many regulators.
Funnily enough, no-one in the room thought this judgement was worth exploring further in the question and answer session.
The many international journalists present seemed equally untroubled by her other three priorities, which were: governments establishing credible programmes to bring down some of the biggest sovereign debt piles we have ever seen; creating jobs for the 48 million plus unemployed in the advanced economies, many of which have seen joblessness rise higher, for longer, than anyone expected; and, finally, that old favourite, tackling global imbalances.
On this last point, Madame Lagarde said the massive current account surpluses and deficits that we saw in the lead-up to the crisis had receded lately, but that was only because of the "conjunctural state of things".
In other words, deficits and surpluses had gone down, but mainly because people in the big deficit countries had less money now to buy stuff from abroad and the big surplus countries are having to pay a lot for their commodity imports.
Imbalances have probably also been helped by the drying up of global trade flows in the past few months, due to worries about the eurozone and the US economy, which could end up hitting the world's banks. These are not very encouraging reasons.
When growth picks up, the managing director said, "imbalances are likely to widen again".
This, too, might be considered worrying. After all, hasn't Sir Mervyn King told us, again and again, that those same high imbalances were the ultimate cause of the crisis and our economy won't properly recover until this big international problem is addressed?
Perhaps. But we didn't get any more on that subject either. None of the journalists present asked a question about it.
None of this is to berate the people sitting in that conference hall. If I were in Tokyo, I might not have asked about these things either; not because they aren't important, but because (a) we have heard them so many times before and (b) it is even less obvious than usual that these IMF and World Bank meetings can do anything about them.
Everyone agrees that the biggest short-term uncertainties hanging over the global economy are US fiscal policy and the crisis in the eurozone.
One month before a presidential election, neither the IMF nor anyone else can have much influence on US policy. And in discussing the rest of the world, US officials in Tokyo are likely to be somewhat distracted, at best.
What about Europe? Surely the IMF still has plenty to play for in Europe? Except, the limited influence the Fund might have had in the eurozone is in danger of ebbing away. True, the European Central Bank (ECB) has asked it to advise on any Spanish support programme going forward, but it is not expected to make a financial contribution to any future bailout.
If you're sitting in Spain - or Greece - the Fund's influence in Europe matters because its view on matters fiscal has now moved quite far from Germany, the European Commission and the ECB.
As I have mentioned several times before, Fund officials have been privately lobbying for a slower pace of fiscal adjustment in the periphery countries for well over a year. But that came more fully into the open this week with the release of the chief economist's new research on the economic impact of fiscal austerity programmes since 2009. I reported on the UK implications of this research into the 'fiscal multiplier' for Radio 4 and BBC1 on 9 October.
Money-wise, the Fund has been a minority partner in eurozone bailout programmes to date. By and large, it has simply gone along with what the rest of the Troika wanted. If it is now to move to a more advisory role, some say that will embolden its officials to speak more openly about what they would call a more growth-friendly solution to the eurozone crisis, with more expansionary policies in the core countries and a slower pace of adjustment in Spain and the rest.
Others inside the Fund take exactly the opposite view: with less "skin in the game", they say, the Fund will have even less capacity to make its voice heard.
Here's what we do know: it is hard to envisage any long-term resolution to the eurozone crisis that does not include a moderate level of growth in the periphery economies, and the Fund now takes a rather different view on how to achieve that growth than the powers-that-be in Brussels or Frankfurt.
The IMF's latest World Economic Outlook has some of the same disconnect between scary content and hum-drum tone that we saw in Christine Lagarde's press conference. Nearly every growth forecast for this year and next was revised down, financial vulnerabilities were "even higher than in the spring" and the downside risks to the forecast were "much higher" as well.
Yet, for all that, Olivier Blanchard allowed himself to suggest, in the foreword, that the "worst might be behind us".
The world is still a scary place, but for the Fund - and for governments - scary is becoming all too normal. The more normal it seems, the less scope there may be for the IMF to make much of a difference.