The IMF wants to increase its financial “firepower” to one thousand billion dollars
“Even when there is no crisis, a large fund, which can have a massive intervention, could help prevent the occurrence of problems. Even if the role of financer is no longer as important, this does not mean that we do not need huge firepower. A 1,000 billion dollar fund is a correct estimate,” said IMF general manager Dominique Strauss-Kahn.
South Korea, which will take over the G20 presidency this year, helped compile the IMF’s plan. Authorities in Seoul are hoping to convinve G20 to back the boost in resources for the international financial institution at a summit held in November ins South Korea.
The fund wants the financing agreements concluded in advance and adjusted for each state, in order to calm investor negative sentiment regarding any country that is facing an imminent liquidity crisis.
In the meeting held by the G20 leaders in London this year, the IMF resources were tripled from 250 billion dollars to 750 billion dollars. One USA official said Washington supports the idea of improving crisis prevention means, but it needs more details on the IMF-South Korea plan.11