THE FINANCE MINISTERS of the world’s biggest economies have agreed on the biggest ever package of reforms for the International Monetary Fund, at a summit in Seoul this weekend.

In a radical reform of the fund’s governance, more than 6% of the voting rights on fund decisions will be given to nations with emerging markets – which up until now had been under-represented on the board – with European nations giving up two seats.

Bloomberg reports that the G20 conference, which continues over the weekend, has also agreed on the structure of a “financial safety net” in order to help repair the damage of economies that fail in the future.

The changes are likely to take about a year to bring into effect, meaning it is unclear whether such a ‘safety net’ would be in place if Ireland were to need it at some point in the near future.

The IMF’s managing director Dominique Strauss-Kahn said the “historical agreement” would see the lender take on a larger, more nurturing role in the development of smaller economies, as well as governance of currencies.

The G20 nations – 19 major economies, plus the European Union – also signalled that it would try to avoid a “currency war”, but failed to give any specific targets on how to do so.

The Financial Times (subscription needed) reports that the group had agreed a general principle not to engage in such ‘wars’, which would see various countries move to devalue their currencies in an attempt to make their exports more competitive on the global markets.

British chancellor George Osborne admitted to the paper that the countries “should have something more country specific. Just having a single target risks being too broad a tool.”

It is hoped that a more concrete agreement can be reached next month when the leaders of the countries meet to continue the summit.