The International Monetary Fund intends to boost its lending capacity from the current level of $385 billon by asking members to contribute more funds, up to $600 billion, as it seeks to forestall the spread of the European debt crisis.
Bloomberg reported that Christine Lagarde, managing director of the Washington-based IMF, said that staff members are reviewing ways to increase available lending funds. Eurozone countries have already promised to kick in some 150 billion euros ($192 billion), although the U.S. has said it does not intend to up its contribution and G20 nations were unable to agree on funding at their last meeting in 2011.
In a statement, Lagarde said, “The biggest challenge is to respond to the crisis in an adequate manner and many executive directors stressed the necessity and urgency of collective efforts to contain the debt crisis in the euro area and protect economies around the world.”
An unidentified G20 official was quoted in the report saying that oil-producing countries, Brazil, China, India, Russia and Japan were being pushed by the IMF to contribute additional funds toward the new lending goal. The official added that it was hoped such an agreement could be nailed down at the Feb. 25-26 meeting of G-20 finance ministers and central bankers in Mexico City.
At a November summit in Cannes, France, G20 officials held off on any additional contributions and insisted instead that Europe’s governments work harder at fixing their troubles. In the meantime, they said, they would make sure “continues to have resources to play its systemic role.” Still, G20 deputy finance officials scheduled to meet this week in Mexico City are expected to discuss Lagarde’s proposal.