An influential think-tank in the United States will today demand that the International Monetary Fund be abolished unless it agrees to immediate and far-reaching reforms. The Washington-based American Enterprise Institute (AEI) will push for a more radical package of measures than those outlined by British Prime Minister Tony Blair earlier this week. Charles Calomiris, director of AEI's project on financial deregulation and a professor at Columbia Business School, will unveil a reform plan covering lending rules and funding. 'Abolishing the IMF may be the right policy to pursue if it turns out that the path to reform is blocked by those with vested interests in preserving the status quo,' Mr Calomiris said. 'It's possible to design a global safety net that properly allocates risk, eliminates - or at least significantly reduces - problems of moral hazard, and still provides protection against illiquidity problems,' he said. The 54-year-old Bretton Woods institutions are under intense pressure to reform from the US Congress and Mr Blair - chairman of the Group of Seven leading industrialised nations - and US industry groups. Critics claim the global economic contagion that has swept through Asia, Russia and Latin America highlights the shortcomings of the institutions. This pressure is expected to intensify ahead of the IMF-World Bank annual general meeting next month. Mr Calomiris said his proposals would eventually replace the IMF, other lending programmes, including the Exchange Stabilisation Fund and ad hoc emergency lending by the World Bank and InterAmerican Development Bank. His proposals back Britain's call for the creation of a code of fiscal and financial conduct for all states seeking the protection of the IMF's safety net. 'For the system to work, membership must be meaningful and membership must be valuable, otherwise the ability to free ride will undermine the willingness to reform domestic banking systems and other policies.' The proposed changes would also avoid IMF 'micro-management' during crises, he added. Key reform measures would involve the redesigning of rules governing IMF lending, international competition in banking, global banking flows and government debt management policies. Banks would be required to maintain a 20 per cent reserve requirement relative to bank debt with half to be held offshore, partly to protect against government confiscation. Mr Calomiris said: 'Simplifying the IMF's role and decision-making process by setting simple, meaningful, and publicly observable membership criteria, and placing strict bounds on how and when the IMF provides assistance, would be a welcome means of reducing politically motivated distortions.'