BROUGHT TO BOOK: Bankers try to shy away from front-page news but the anti-globalisation movement does its best to demonise the International Monetary Fund as sinister and all-powerful. While this may be a predictable view, even to many well-informed observers the IMF is something of a mystery.

The Chastening

(Inside the crisis that rocked the global financial system and humbled the IMF)

By Paul Blustein

PublicAffairs Ltd

£19.99 (UK)

What is the reality behind the tinted windows of the limousines that glide through world capitals? Who will win the titanic struggle between the well-intentioned banker and the "electronic herd" (mutual funds, pension funds, commercial banks, insurance firms and other money managers) - the good guys or the baddies?

The Chastening examines the crises of the late 1990s and the efforts of the global economy's high command to control them. Here the IMF was joined by the US Treasury, the Fed and other G7 economic agencies.

Blustein's authoritative narrative begins with the failure of the IMF's rescue bid in Korea in December 1997. But this was not the only scare, as panics in the financial markets proved resilient to the efforts of policymakers, with IMF bail-outs falling flat and currencies crashing.

The alleged failures of the IMF and its future role, if it should have one, have long been topics of debate. The one thing everyone can agree on is that something has to change.

Blustein stresses there is no excuse for ignoring the implications of the crises of the late 1990s. The institutions and mechanisms safeguarding the global system are perilously weak, he argues, and radical surgery is imperative before disaster strikes again.

One leading advocate of change is the deputy governor of the Bank of England, Mervyn King, who argues that the IMF should have more authority to support "standstills" when the electronic herd threatens to bring a national financial system crashing down. Countries need the protection from creditor panics that is afforded to companies under bankruptcy regulations.

Rising IMF star Anne Krueger is an influential proponent of this solution, but implementation is some years off even if she succeeds in winning approval for this strategy.

Creating a more stable global financial system is in everyone's interest. As any banker would say, too much excitement is bad for you.