IMF reveals £267bn boost to coffers
The International Monetary Fund (IMF) has raised more than 430 billion dollars (£267 billion) in an effort to assure finance markets that it has sufficient fire power to handle any new problems from Europe's prolonged debt crisis.
IMF managing director Christine Lagarde announced the new figure at the conclusion of talks among finance officials of the Group of 20 major economic powers in Washington.
She said that some countries including Russia, India, China and Brazil had made private pledges but did not want to issue public commitments until they had conferred with officials in their home capitals.
But she said when the public and private commitments were combined, the total raised would exceed 430 billion dollars, nearly doubling the IMF's available resources to make loans to nations in trouble.
Ms Lagarde called the fundraising a "huge effort" that would increase the current 485 billion dollars (£300 billion) in funds available for loans to a figure above 1 trillion dollars (£620 billion).
"We have the necessary tools in the tool box and we will use this wisely," she told reporters at a news conference wrapping up discussions among finance ministers and central bank governors of the G20 countries. The group includes traditional economic powers such as the United States and Germany and emerging powers such as China and Brazil.
Ms Lagarde said the extra resources would create to the stability of the global economy. Finance officials hope that the sizeable increase in IMF resources will reassure financial markets that there will be a backstop should another, larger European country get into trouble in repaying its government debts.
Already three European nations - Greece, Ireland and Portugal - have been forced to accept IMF rescue packages along with sizeable bailout support from other nations using the euro currency. But the concern is that Spain and Italy, much larger economies, are now facing economic difficulties. If either of those nations needed rescue packages, the costs would be far higher than what has been raised so far.
The fund raising effort exposed splits inside the 188-nation IMF. The United States and Canada refused to participate in boosting the IMF's resources, seeking to keep pressure on Europe to do more.
And the four countries that did not publicly reveal their contributions - China, Russia, India and Brazil - all expressed reservations about pledging additional resources until the IMF implements a 2010 agreement to give emerging market nations more of a say in how the IMF operates. There are doubts whether the deal to boost the voting power of China and other emerging countries can be achieved by the deadline of the autumn meetings of the IMF.