Emergency funds set to double

Faster response required in the fight against future financial crises. Diane Coyle reports from Washington

The International Monetary Fund expects its members to agree this weekend to a doubling of its emergency funds, one of the most important steps towards improving its ability to react to financial crises

Finance ministers gathering in Washington on the eve of the IMF's annual meeting will approve proposals to provide a $50bn-plus fighting fund to tackle emergencies like the Mexican financial crisis. The new arrangement should be in place by next spring.

Michel Camdessus, the IMF's managing director, said yesterday: "This is a very important and timely initiative."

The Group of Seven (G7) industrial countries agreed at their summit in Halifax in June to a significant extension to the IMF's General Arrangements to Borrow. These are a $27-bn overdraft facility provided by the G7 and the four other countries - Belgium, the Netherlands, Sweden and Switzerland - which make up the G10. The decision was a reaction to the Mexican financial crisis, even though the Fund financed its $17.8-bn loan to Mexico out of its own resources.

However, progress on extending the GAB has been slowed by negotiations to involve other countries. Austria, Australia and Korea, for example, are being approached for contributions to a new, parallel arrangement to the existing GAB. Although the non-G7 members of the G10 fear dilution of their influence, their bigger partners believe it is essential to make other important economies take up their responsibilities to the international community.

Terms of the new parallel arrangement are still under discussion but Mr Camdessus said yesterday: "I hope they come to a decision as rapidly as possible. We need to have a mechanism permanently in place."

The IMF has failed, though, in another bid to increase its resources. Ministers are unlikely to agree to a general increase in the subscriptions paid by member countries.

As another part of its post-Mexico improvements, the Fund expects to have stricter standards for economic statistics provided by members in place by next April: 12 basic measures that all countries must provide monthly, and a more demanding standard for countries that borrow in the international financial markets.

Mr Camdessus said the Fund was working on making the information available electronically to the financial markets. "One of the best ways for countries to protect themselves against erratic behaviour by the financial markets is to provide all the relevant data. Markets hate surprises," he said.

The Mexican crisis, which triggered the flurry of activity to improve the IMF's surveillance procedures and financial resources, is well on its way to resolution, Mr Camdessus said. The country had met the IMF's economic conditions and would qualify for another $1.6bn disbursement in mid-November, on top of the $12bn it has already received from the Fund.

News
people'It can last and it's terrifying'
Sport
Radamel Falcao
footballManchester United agree loan deal for Monaco striker Falcao
Sport
Louis van Gaal, Radamel Falcao, Arturo Vidal, Mats Hummels and Javier Hernandez
footballFalcao, Hernandez, Welbeck and every deal live as it happens
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
News
peopleA spokesperson said the support group was 'extremely disappointed'
Voices
A man shoots at targets depicting a portrait of Russian President Vladimir Putin, in a shooting range in the center of the western Ukrainian city of Lviv
voicesIt's cowardice to pretend this is anything other than an invasion
News
i100
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
Arts and Entertainment
booksNovelist takes aim at Orwell's rules for writing plain English
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The eyes have it: Kate Bush
music
News
i100
Life and Style
tech

Apple agrees deal with Visa on contactless payments

Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Technical Software Consultant (Excel, VBA, SQL, JAVA, Oracle)

£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...

SQL DBA/Developer

£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...

.NET Developer

£650 per day: Harrington Starr: .NET Developer C#, Win Forms, WPF, WCF, MVVM,...

Java/C++ Developer

£350 - £375 per day: Harrington Starr: Looking for a Java/C++ Developer to wor...

Day In a Page

Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor