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07 December 2011

IMF revamps lending options in response to global crisis


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IMFは、予防を目的とする貸出の一種を改定し、その緊急時の支援の範囲を広げている。IMFはPLL(予防的流動性枠)を通じて、幅広い状況において事前に流動性を提供することができる。


The Rapid Financing Instrument enhances the IMF’s instruments for emergency assistance, and may be used to support member countries experiencing a range of urgent balance of payments needs, including needs arising from commodity price shocks, natural disasters, post-conflict situations, and other emergencies. The Rapid Financing Instrument will improve the IMF’s ability to provide low-access financial assistance to member countries with urgent financing needs, without the need for a full-fledged program.

“The IMF has been asked to enhance its lending toolkit to help the membership cope with crises. We have acted quickly, and the new tools will enable us to respond more rapidly and effectively for the benefit of the whole membership”, IMF Managing Director Christine Lagarde said.

“The reform enhances the Fund’s ability to provide financing for crisis prevention and resolution. This is another step toward creating an effective global financial safety net to deal with increased global interconnectedness.”

Strengthening the global financial safety net

As part of its broader response to the 2008 global financial crisis, the IMF approved comprehensive reforms to strengthen its capacity to prevent and resolve crises, resulting in the creation of the Flexible Credit Line and the Precautionary Credit Line. To date, three countries—Mexico, Poland and Colombia—have used the Flexible Credit Line, while Macedonia is the only country to have accessed the Precautionary Credit Line.

As part of the process of preparing the latest lending reforms, the IMF reviewed the role that the Precautionary Credit Line and the Flexible Credit Line played in helping mitigate the effects of the global financial crisis. The review found that both facilities provided valuable insurance during the crisis, and helped boost confidence and moderate balance of payments pressures, not just for the countries that accessed the credit lines, but also for other countries in similar circumstances. The effect can be measured through lower spreads for the four countries that accessed the facilities and lower crisis probabilities for countries in similar circumstances (see chart).

Providing rapid liquidity to good performers and crisis bystanders

The introduction of the Precautionary and Liquidity Line will enable the IMF to provide liquidity in a broader range of circumstances, including as a short-term liquidity window for countries with sound policies affected by exogenous shocks. Such shocks can arise, for instance, as a result of heightened regional or global stress in financial markets.

The Precautionary and Liquidity Line responds to the need to provide adequate liquidity to countries that are threatened by virulent and contagious shocks even though they themselves have sound policies and economic fundamentals―the crisis bystanders. This new credit line builds on the strengths and broadens the scope of the old Precautionary Credit Line.

Among other innovations, the Precautionary and Liquidity Line can be used by countries with an actual financing need at the time of approval of IMF support (the Precautionary Credit Line could only be used by countries with potential financing needs). It also offers the possibility of upfront liquidity to meet immediate short-term financing needs of qualifying countries.

In this way, the Precautionary and Liquidity Line complements the crisis prevention and resolution role of the Flexible Credit Line, which remains in place. As is the case with the Flexible Credit Line, countries qualify for the Precautionary and Liquidity Line through a rigorous qualification process. This is complemented by streamlined conditionality focused on addressing any remaining vulnerabilities.

Arrangements under the Precautionary and Liquidity Line can be approved for a period of six months or one–two years, in both cases to address actual or potential financing needs. Six-month arrangements allow upfront access to IMF resources for up to 250 per cent of quota.

In exceptional circumstances arising from an exogenous shock, qualifying member countries with larger short-term financing needs could double their access―possibly by means of a single successor short-term arrangement. Six-month arrangements will not be subject to traditional programme monitoring involving reviews by the IMF’s staff and Executive Board.

Press release



© International Monetary Fund


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