IMF wants $1 trillion in total lending capabilities
THE International Monetary Fund (IMF) wants to beef up its lending capabilities to $1 trillion (£657bn) to prevent future financial crises.
The IMF wants to agree financing deals in advance that will be specially tailored to individual countries, rather than respond to crises with conditional loan packages, the Financial Times reported yesterday.
“Even when not in a time of crisis, a big fund, likely to intervene massively, is something that can help prevent crises,” Dominique Strauss-Kahn, the IMF managing director, told the FT.
“Just because the financing role decreases, doesn’t mean we don’t need to have huge firepower … a $1,000bn fund is a correct forecast.”
South Korea, which is this year’s president of the G20, is helping to design the plan, which would see member countries back the additional commitments ahead of a summit to be held in Seoul in November.
Dominique Strauss-Kahn has been working hard since the global crisis started to enhance the IMF’s role in countering financial crises. At the G20 summit in London last year, the IMF’s fund trebled to $750bn from $250bn.