Christine Lagarde: IMF may need billions in extra funding

[Bosonic]

Source: Telegraph

The head of the IMF has warned that its $384bn (£248bn) war chest designed as an emergency bail-out fund is inadequate to deliver the scale of the support required by troubled states.

In a document distributed to the IMF steering committee at the weekend, Ms Lagarde said: "The fund's credibility, and hence effectiveness, rests on its perceived capacity to cope with worst-casescenarios. Our lending capacity of almost $400bn looks comfortable today, but pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders."

The suggestion came after European officials revealed they were working on a radical plan to boost their own bail-out fund, the European Financial Stability Facility (EFSF), from €440bn (£384bn) to around €3 trillion.

The plan to increase the EFSF firepower is the crucial part of a three-pronged strategy being designed by German and French authorities to stop the eurozone's debt crisis spiralling out of control. It also includes a large-scale recapitalisation of European banks and a plan for an "orderly" Greek default.

Read more: http://www.telegraph.co.uk/finance/financialcrisis/8788223/Christine-Lagarde-IMF-may-need-billions-in-extra-funding.html

[customerserviceguy]

1. Well, this ought to be interesting

Wonder who gets the short end of it when the IMF dries up?

[msongs]

2. gee maybe it can go austerity and live within its own budget yes? Parasites nt

[jwirr]

3. I do not want to bail out any organization that has f--ked up the world

as bad as the IMF.

[lunatica]

4. Will we get to bail them out too?

But in all seriousness this isn't good. The IMF isn't great, but that they're also in financial trouble isn't good for the rest of the world.

We might all fall like dominoes.

[saras]

5. ...and a 200,000 pound weight of cast irony falls from the sky and crushes everyone. End of skit.