AND THE THIRD ANGEL FOLLOWED THEM, SAYING WITH A LOUD VOICE, IF ANY MAN WORSHIP THE BEAST AND HIS IMAGE, AND RECEIVE HIS MARK IN HIS FOREHEAD, OR IN HIS HAND.
*** REVELATION 14:9
Wednesday, January 18, 2012
IMF Seeks $500B Boost to Lending Resources
By Simon Kennedy - Jan 18, 2012 10:04 AM ET
Christine Lagarde, managing director of the International Monetary Fund (IMF). Photographer: Michele Tantussi/Bloomberg
TheInternational Monetary Fundis proposing to raise its lending capacity by as much as $500 billion to insulate the global economy against any worsening of Europe’s debt crisis.
The Washington-based lender is aiming to increase its resources after identifying a potential need for $1 trillion in financing in coming years, an IMF spokesman said in a statement. The IMF is studying options and will not comment further until it has consulted its members, the fund said. To incorporate a cash buffer, the lender is seeking a total $600 billion.
IMF Managing Director Christine Lagarde said yesterday her staff are looking at ways to expand the fund’s war-chest, which currently has about $385 billion available. While euro-region nations have already pledged to contribute 150 billion euros ($192 billion), the U.S. has said it has no plans to make new bilateral loans and leaders of Group of 20 nations ended last year at odds over the issue.
“The biggest challenge is to respond to the crisis in an adequate manner and many executive directors stressed the necessity and urgency of collective efforts to contain the debt crisis in the euro area and protect economies around the world,” Lagarde said yesterday in an e-mailed statement following a discussion among her institution’s board of directors.
The IMF is pushing China, Brazil, Russia, India, Japan and oil-exporting nations to be the top contributors, according to a G-20 official, who spoke on condition of anonymity because the talks are private. The fund wants a deal struck at the Feb. 25- 26 meeting of G-20 finance ministers and central bankers in Mexico City, the official said.
The push for more money by the IMF may extend this month’s rally in investor sentiment toward European debt markets on speculation the region is enjoying a respite from its two-year debt turmoil and that any euro-area recession may be shallow.
The euro rose 0.8 percent to $1.2833 as of 2:50 p.m. in London.
In a sign the crisis may have longer to run, the World Bank cut its global growth forecast yesterday by the most in three years to 2.5 percent this year and said the euro area may contract 0.3 percent. Euro-area countries also need to repay 157 billion euros of maturing debt this quarter, according to UBS AG calculations.
Talks This Week
Lagarde’s proposal is set to be discussed by G-20 deputy finance officials, scheduled to meet this week in Mexico. At a November summit in the French resort of Cannes, G-20 leaders balked at writing fresh checks for the IMF, demanding that Europe’s governments do more to fix their crisis while saying they would ensure the IMF “continues to have resources to play its systemic role.”
A U.S. official reiterated that stance last month, saying President Barack Obama’s administration won’t stump up more cash for the IMF and that a solution to the turmoil must be led by Europe.
Russia’s government won’t decide on any contribution before March presidential elections, First Deputy Prime Minister Igor Shuvalov said in an interview in Moscow today.
Greater support for the IMF also attracted controversy within Europe. Germany’s Bundesbank coupled its 41.5 billion- euro input to a promise that the aid not be earmarked for Europe. Such recycling would violate euro rules that bar central banks from financing government deficits. As a result, the euro area will lend to the IMF’s general resources, not to a special crisis fund.
Options for raising the IMF’s resources include opening a trust fund or not rolling back a 2009 increase. Officials have also discussed increasing the amount of the fund’s Special Drawing Rights.
Emerging-market countries may try to twin the call for help with a push to increase their clout at the IMF. Such nations, which are growing twice as fast as their developed counterparts, say that their voting power doesn’t reflect their weight in the global economy and they want to end the tradition of selecting a European to head the institution.