February 23, 2012 / 3:13 PM / 6 years ago

G20 not close to IMF resources agreement: Canada

TORONTO (Reuters) - The Group of 20 wealthy and emerging nations is not close to an agreement on increasing the resources of the International Monetary Fund to help it cope with Europe’s debt crisis, a senior Canadian finance official said on Thursday.

IMF Managing Director Christine Lagarde attends a news conference after a Eurogroup meeting in Brussels February 21, 2012. REUTERS/Yves Herman

The official repeated Canada’s position that Europe must increase funding for its own financial firewalls before any broader move to increase IMF resources.

The comments came ahead of a weekend meeting of G20 finance ministers and central bankers in Mexico.

Ottawa agrees with the IMF’s assessment that Europe should increase the size of its firewall by roughly $500 billion, the finance official said.

U.S. policymakers have also urged European leaders to put up a convincing financial firewall to prevent the debt crisis in the hardest hit euro zone countries from spreading throughout the currency bloc.

The Canadian official said there were positive signs in Europe, noting that Portugal’s financial situation is more sustainable than that of Greece and that Ireland is on a firm track.

The official said the U.S. Volcker rule, which limits the ability of banks to make speculative bets with their own funds, is not specifically on the G20’s agenda but is likely to be discussed. Canadian policymakers have criticized some elements of the rule.

On the contentious subject of China’s currency policy, the official said a lot of progress has been made.

Reporting by Jeffrey Hodgson and Janet Guttsman; editing by Rob Wilson

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