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IMF boosts funding to aid countries in trouble

Published:Thursday | June 21, 2012 | 12:00 AM

The International Monetary Fund (IMF) says nations from around the world have firmed up their commitments to provide emergency resources to deter the spread of crises and increase the institution's lending capacity to help Caribbean and other countries in financial trouble.

"Countries large and small have rallied to our call for action," said IMF Managing Director Christine Lagarde, who was attending a meeting of the Group of 20 industrialised and emerging market countries in Los Cabos, Mexico.

"I salute them and their commitment to multilateralism," she adding, stating that as a result the total pledged has risen to US$456 billion, almost doubling the Washington-based financial institution's lending capacity.

"With today's announcements, some 37 of the IMF's member countries, representing about three-fifths of total quota in the organisation, have joined this collective effort, demonstrating the broad commitment of the membership to ensure the IMF has access to adequate resources to carry out its mandate in the interests of global financial stability," Lagarde continued.

The G-20 and the broader membership of the IMF had pledged a total of US$430 billion in April to help reinforce the IMF at a time of global uncertainty, particularly because of the crisis in Europe.

The IMF, which has 188 member countries, stressed that the new resources would be available for crisis prevention and resolution, and to meet the potential financing needs of all members.

"The IMF is committed to assuring our members' interests and resources are safeguarded," Lagarde told the meeting.

The IMF has warned that global risks are on the rise again and has urged policymakers to act together to achieve lasting stability and growth, and boost job creation.

Comprehensive action

In particular, the IMF has called for comprehensive action to revive growth and reduce unemployment in Europe.

Following the Los Cabos summit, Lagarde stated that the G-20 joint leaders' declaration was a step in the direction of restoring confidence in the global economy.

"We have more work to do before global recovery is assured, but I take away from Los Cabos a sense of convergence that will facilitate the comprehensive and coordinated approach to global economic and financial challenges advocated by the IMF," she said, adding that the seeds of a pan-European recovery plan had been planted.