IMF may need more cash if crisis persists
The International Monetary Fund has record levels of liquidity to bail out countries but if the financial crisis continues much longer it may need more resources, a senior IMF official said on Tuesday.
Latin America seeks to defuse crisis"It is worth thinking that if the problems continue to grow that we might think about whether we would need additional resources and we will be discussing with our members that possibility," IMF First Deputy Managing Director John Lipsky told CNBC cable news network. "For now we have record liquidity."
The global lender has said it can easily tap over $200 billion (125 billion pounds) in resources and can quickly access more if needed.
In a matter of days, the IMF has committed $2.1 billion to Iceland and $16.5 billion in loans to Ukraine and is drafting details of financing for Hungary as the financial storm turns on emerging economies.
Countries are usually allowed to lend up to three times their IMF quota, but in Iceland's case it was 11 times bigger and Ukraine's loan was eight times.
In each case, IMF Managing Director Dominique Strauss-Kahn has said the extent of the crisis justifies exceptional access.
Each IMF member is assigned a quota based on its size in the world economy. The quota determines how much a country contributes to the IMF, its voting power and has a bearing on how much it can borrow.
With little end in sight for the the world's biggest financial crisis since the 1930s, British Prime Minister Gordon Brown on Tuesday said the IMF may need substantially more funding.
He said countries with substantial reserves such as China and the Gulf States could contribute more to the IMF. He will visit the Gulf at the weekend where the issue is expected to be raised.
He said he was also speaking to Chinese Premier Wen Jibao in coming days.
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