Lagarde: IMF funding need may be less than thought

AP News
Posted: Apr 12, 2012 2:02 PM
Lagarde: IMF funding need may be less than thought

The head of the International Monetary Fund says the lending agency might not need as large a boost in financial resources as first thought to address Europe's debt crisis.

IMF Managing Director Christine Lagarde didn't elaborate in a speech Thursday beyond citing an improved "economic climate." She says she hopes to resolve the issue when the IMF holds its spring meeting in Washington next week.

The IMF has about $385 billion in resources it can use to provide loans to troubled countries. In a January speech in Berlin, Lagarde discussed raising that total by up to an additional $500 billion, bringing the IMF's resources for lending close to $1 trillion.

Her comments Thursday suggested that the IMF might need less, though she cautioned that even with recent gains, the global economy still faced many threats.

"We have seen some improvement in the economic climate," she said. "But let me also underline this point: The risks remain high, the situation fragile."

Asked whether she had a new figure in mind to replace the $500 billion, Lagarde said she was "not fixed on a number yet" but hoped the discussions next week would help resolve the question.

The 187-nation IMF and its sister lending institution, the World Bank, will hold their spring meetings in Washington at the end of next week. Those discussions will be preceded by a meeting of finance ministers and central bank presidents of the Group of 20 major industrial countries. Those nations represent about 85 percent of the global economy.

The United States, the IMF's largest shareholder, has said it won't contribute to an increase in IMF resources. Other countries outside Europe have expressed reluctance, too.