In the last decade, the international financial institutions (IFIs) have been called on by member countries more often than ever before to address financial crises, assist governments that are making economic and social reforms, and help poor countries find new ways to develop and grow. The International Monetary Fund (IMF), the World Bank Group, and the regional development banks have all assisted these efforts, which have ranged from treating financial crises in Mexico, Asia, and elsewhere, to helping centrally planned countries move to market economies, to facilitating debt reduction in the poorest nations. This has occurred as the global capital markets themselves were transformed. Private capital now flows around the world in unprecedented quantities and varieties, some going to developing countries that previously would have looked to private markets in vain. At the same time, questions have increased concerning the effectiveness of the institutions in addressing global financial challenges, their structures, their priorities, their fundamental approaches, and their flexibility. How well are the international financial institutions doing their jobs in the face of these new challenges and opportunities? What should be the role of IMF? Are financial crises unavoidable, or have the IFIs' actions made them more likely? How should the World Bank and the regional development banks change their operations to be more effective in the new environment? There are great differences of opinion on these questions. We can anticipate a public discussion of these issues as the new Bush administration develops its policies on international financial institutions over the coming months. We hope that the expert viewpoints represented in this issue of Economic Perspectives will help to clarify the issues.