Talks over IMF lending boost inch forward
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Emerging Markets

Talks over IMF lending boost inch forward

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Finance ministers from leading emerging economies have expressed willingness to provide the IMF with additional funding, but a deal is unlikely this month

Hopes rose this week that the IMF could see its resources boosted to combat a fresh global crisis, though a deal to boost the Washington lender seemed unlikely before next month.

Leading emerging market officials at a G20 meeting in France expressed renewed willingness on Friday to throw their weight behind a possible increase in the Fund’s lending resources, as Emerging Markets first reported last month.

But the IMF’s biggest shareholders, including the US, sought to downplay the prospects of any deal on more firepower for the Fund before Europe stumps up more of its own resources to resolve its sovereign and banking crises.

Developing country support for any IMF resource boost is seen as critical – and many hope it could see emerging nations gain a greater shareholding in the institution in return.

Many non-European shareholders continue to feel aggrieved at both the manner and the fact of Christine Lagarde’s appointment as the fund’s new managing director in June, and have called for greater representation for emerging market shareholders, highlighting tensions among the Fund's shareholders as to its future role, governance and credibility.

For in-depth analysis on whether or not the IMF's resources should boosted, see IMF: At the Crossroads.

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