Lagarde eyes trimmed $400 billion rise in IMF funds

Tue Apr 17, 2012 3:20am EDT
 

MILAN (Reuters) - The International Monetary Fund hopes to gain governments' agreement this week to raise its funds by more than $400 billion, around two thirds of the amount it said it would need three months ago, fund managing director Christine Lagarde signaled on Tuesday.

Lagarde, who had already signaled the fund would need less than previously thought, said the success of some countries in raising funds on financial markets in the first quarter had eased the pressure on its crisis-fighting resources.

In an interview in Tuesday's Il Sole 24 Ore, she praised reform efforts by Italy's government and said market confidence had improved since Rome agreed to enhanced surveillance by the IMF. She also saw progress in Spain.

"I really hope this week we'll reach the critical mass of more than $400 billion. We are determined to do all we can," she was quoted as telling Italy's main financial newspaper, though she also said finally sealing the funds might take a bit longer.

Finance chiefs meet in Washington on April 20-21.

"I am ready to leave the matter open for a few weeks: some countries need a little bit more time for parliamentary approval," she added.

In January, the IMF estimated it would need $600 billion in new resources. Officials from the Group of 20 nations told Reuters last week the world's major economies were likely to agree to provide the IMF with somewhere between $400 billion and $500 billion.

In the interview, Lagarde said credit crunch risks had receded.

"The overall risk evaluation is unchanged, but it's April now and some countries have already raised on the markets more than half of what they need for 2012, so our estimate has shrunk,"   Continued...

 
International Monetary Fund Managing Director Christine Lagarde speaks at the Brookings Institution on "Seizing the Moment: Thinking Beyond the Crisis" in Washington April 12, 2012. REUTERS/Kevin Lamarque