Global Financial Leaders Double IMF Lending Power
By MacKenzie C. Babb
Staff Writer
Washington - Members of the International Monetary Fund (IMF), led by the
G20 advanced and emerging market economies, pledged to boost the global fund's
lending capacity by more than $430 billion during the annual IMF and World Bank
Spring Meetings April 19-22 in Washington.
"This effort, together with the national and regional structural, fiscal
and monetary actions that have been put in place in the past months, shows the
commitment of the international community to safeguard global financial
stability and put the global economic recovery on sounder footing," said a joint
statement by the G20 and the IMF's policy-setting International Monetary and
Financial Committee (IMFC).
The pledges, which will nearly double the fund's resources, came in
response to a call for more financial firepower by IMF Managing Director
Christine Lagarde. Speaking to the hundreds of finance and economic leaders
gathered for the start of the Washington meetings April 19, Lagarde said the
global economy has entered a "timid" recovery but still faces high risks. She
said the IMF requires additional resources to promote global economic stability
and to contain any further financial crises.
"This broad-based response to our request for additional resources will
help strengthen global economic and financial stability in the interests of all
our members," Lagarde said in an April 20 statement.
Lagarde said the pledges signal "the strong resolve of the international
community to secure global financial stability," and that the money will be made
available for crisis prevention and resolution.
The funds "will be drawn only if they are needed and, if drawn, will be
refunded with interest," Lagarde added.
She said the money will be available for the whole membership of the IMF,
and not earmarked for any particular region.
Speaking to the IMFC meeting April 21, U.S. Treasury Secretary Tim Geithner
said the United States welcomed the decision to add to IMF resources and
"continues to support the smooth functioning of international financial markets"
as the largest contributor to the IMF and the World Bank.
He said the groups' annual meetings focused largely on the global economic
recovery. The outlook has improved, and progress is being made to reduce global
imbalances.
"The positive tone of recent data suggests the economy is gradually healing
and getting stronger, but the financial crisis put our economy in a deep hole
and it will take time to fully repair the damage and to restore economic
security," Geithner said, noting that unemployment rates are still high, the
housing market continues to be weak and growth remains slow.
He said the United States will continue to work with its international
partners to support the recovery.
In addressing the IMF and World Bank's joint development committee,
Geithner said the World Bank is an "indispensable partner for the United States"
in leveraging resources to provide concrete results. He announced an increase in
U.S. funding for the World Bank that will "help immunize 200 million children,
extend health care services to more than 30 million people, give access to
improved water sources to 80 million people, help build 50,000 miles of roads
and train and recruit more than 2 million teachers."
Calling the World Bank an effective tool for combating global development
challenges, Geithner said talks during the meetings covered improving food
security, ensuring gender equality, protecting the environment and promoting
sustainable and inclusive economic growth around the world.
The economic and financial leaders are scheduled to meet again in October
for the IMF and World Bank Fall Meetings in Tokyo.
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