IMF builds new mechanism to curb financial crisis

The International Monetary Fund is building a new credit mechanism for use in case of a global financial crisis, IMF deputy managing director Naoyuki Shinohara said on March 12.

The G-20, which groups the world’s leading developed and developing economies, pledged to triple IMF capacity of lending to 750 billion USD to help the institution supply financial sources to the global economy if another economic or financial crisis occurs.

The International Monetary Fund isbuilding a new credit mechanism for use in case of a global financialcrisis, IMF deputy managing director Naoyuki Shinohara said on Mar. 12.

The G-20, which groups the world’s leading developed and developingeconomies, pledged to triple IMF capacity of lending to 750 billion USDto help the institution supply financial sources to the global economyif another economic or financial crisis occurs.

The sources will come from the gold reserve or bond issuance. IMFissued its bonds from July 1, 2009 to call for investment from itsmembers to support other members.

The same day, IMF managing director Dominique Strauss-Kahn praised India for its purchase of 10 billion IMF bonds.

Earlier, Japan had bought 100 billion USD, China, 50 billion USD, theEU, 178 billion USD, the Republic of Korea, Switzerland, Russia, Braziland Canada, each bought 10 billion USD, while Australia bought 5.7billion USD and Norway, 4.5 billion USD.

Dominique Strauss-Kahn said that the investment will help IMF tostrengthen its financial system, ensure plentiful funding to meetcredit demands from member countries./.