WASHINGTON (AP) -- The International Monetary Fund will sell bonds as a way to raise funds to lend to struggling nations, the head of the organization said Saturday, in a victory for developing countries.The final paragraph makes clear that one of the alleged positive contributions that arose from the G20 gathering was actually little more than a catchy headline where all of the heavy lifting still has to be done.
Emerging economies such as China, Brazil and India pushed for the move as an alternative to providing longer-term loans to the IMF. Those countries want a greater voice in the institution before providing additional resources.
IMF Managing Director Dominique Strauss-Kahn said China and other countries have expressed interest in purchasing the bonds. The IMF has never issued bonds before, although the idea was explored in the 1980s.
The move, announced after the IMF's annual spring meeting, indicates the world's leading economies are having difficulty following through on a pledge made in London April 2 to boost an IMF emergency lending facility by $500 billion. The bonds will contribute toward that goal but will provide shorter-term financing than the loans that Japan, the European Union and the United States have promised.
Sunday, 26 April 2009
The One Trillion Dollar Headline for the IMF's future funding on the G20 press releases is already in trouble as the following news release makes clear. The IMF is now joining the queue to sell bonds to raise the money that was "pledged" at the meeting at the beginning of April in London.