IMF looking to boost lending resources by $250bn

19 July 2010

The International Monetary Fund (IMF) is seeking to raise its lending resources by around $250 billion.

Dominique Strauss-Kahn, the IMF managing director, told the Financial Times that its current $750 billion fund needs to be increased to $1,000 billion to give the body the "huge firepower" it requires to operate successfully.

"Even when not in a time of crisis, a big fund, likely to intervene massively, is something that can help prevent crises," he stated.

The IMF wants to alter its role so that rather than providing conditional loans when crises occur, it sorts out a financing agreement with each country in advance, specifically tailored to their needs.

It hopes such a strategy would cool market nerves should a nation be facing economic difficulties.

In May, the IMF warned that one country facing "severe challenges" is Spain, because of its large fiscal deficit, anaemic productivity growth and low levels of competitiveness.

By Claire Archer

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