IMF to Press G-20 to Boost Lending Resources to $1 Trillion, Official Says
Jul 19, 2010
The International Monetary Fund is seeking a boost in its lending capacity to $1 trillion, from the current $750 billion, at a Group of 20 summit in South Korea in November, according to a Korean government official.
The increase would help strengthen a global financial safety net to counter crises, the official said on condition of anonymity because the talks are private. South Korea is chair of the G-20 this year. IMF Managing Director Dominique Strauss-Kahn told the Financial Times that a boost to $1 trillion in IMF lending firepower was a “correct forecast.”
Strauss-Kahn has sought to enhance the IMF’s role in serving as a buttress against financial crises, already overseeing a trebling in the fund’s war-chest to $750 billion since early 2009. While the IMF doesn’t foresee the global economy sinking back into a recession, the European debt crisis and elevated U.S. unemployment threaten to curtail the recovery.
“They will have to increase the lending capacity over time to contain a crisis more effectively,” said Ham Joon-Ho, a professor of international economics and finance at Yonsei University in Seoul. Ham added that the IMF will also need to work to encourage members to line up contingency financing with the fund, which most have steered clear of given concern such a step would carry the “stigma” of signaling financial trouble.
Economic Turmoil
South Korea, which successfully resuscitated its economy and banking system after the 1997-98 Asian financial crisis, has led efforts within the G-20 to adopt additional measures to combat financial and economic turmoil. The IMF discussions are in the context of talks to increase the so-called quotas that members of the Washington-based lender contribute.
“We’ll come to an agreement by the November G-20 summit in Seoul on the capital increase of the IMF,” William Murray, a spokesman for the fund in Washington, said by telephone.
Choi Hee Nam, a director general on a South Korean presidential committee, said today that his nation is willing to increase its quota as part of contributing to global economic and financial stability.
Group of 20 leaders at a Toronto summit called on June 27 for quota reforms to be completed by the summit in Seoul in November. Changes are partly intended to give developing nations a stronger voice.
Jul 19, 2010
The International Monetary Fund is seeking a boost in its lending capacity to $1 trillion, from the current $750 billion, at a Group of 20 summit in South Korea in November, according to a Korean government official.
The increase would help strengthen a global financial safety net to counter crises, the official said on condition of anonymity because the talks are private. South Korea is chair of the G-20 this year. IMF Managing Director Dominique Strauss-Kahn told the Financial Times that a boost to $1 trillion in IMF lending firepower was a “correct forecast.”
Strauss-Kahn has sought to enhance the IMF’s role in serving as a buttress against financial crises, already overseeing a trebling in the fund’s war-chest to $750 billion since early 2009. While the IMF doesn’t foresee the global economy sinking back into a recession, the European debt crisis and elevated U.S. unemployment threaten to curtail the recovery.
“They will have to increase the lending capacity over time to contain a crisis more effectively,” said Ham Joon-Ho, a professor of international economics and finance at Yonsei University in Seoul. Ham added that the IMF will also need to work to encourage members to line up contingency financing with the fund, which most have steered clear of given concern such a step would carry the “stigma” of signaling financial trouble.
Economic Turmoil
South Korea, which successfully resuscitated its economy and banking system after the 1997-98 Asian financial crisis, has led efforts within the G-20 to adopt additional measures to combat financial and economic turmoil. The IMF discussions are in the context of talks to increase the so-called quotas that members of the Washington-based lender contribute.
“We’ll come to an agreement by the November G-20 summit in Seoul on the capital increase of the IMF,” William Murray, a spokesman for the fund in Washington, said by telephone.
Choi Hee Nam, a director general on a South Korean presidential committee, said today that his nation is willing to increase its quota as part of contributing to global economic and financial stability.
Group of 20 leaders at a Toronto summit called on June 27 for quota reforms to be completed by the summit in Seoul in November. Changes are partly intended to give developing nations a stronger voice.