No number yet on boost to IMF from Eurozone c.banks

Monday, 5 December 2011 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Talks on the size of loans from euro zone national central banks to the International Monetary Fund are starting at a technical level after euro zone finance ministers gave the green light to explore the idea last Tuesday, officials said on Saturday.

Euro zone finance ministers agreed on Tuesday to rapidly explore boosting the resources of the IMF through bilateral loans, so that the Fund can match the new firepower of the euro zone bailout fund, which is being leveraged.

“No amount has been discussed at the political level,” one senior euro zone official involved in the talks said.

“Discussions are only starting at the technical level, so right now any number is pure speculation,” the official said.

The euro zone wants to boost IMF resources so that the fund could provide a credible backstop should the euro zone’s third and fourth largest economies of Italy and Spain be cut off from the markets and need a multi-year emergency loan programme.

Euro zone officials have offered various guesses on the possible size of loans to the IMF, ranging from “significantly less than 100 billion euros” to “several hundred billion euros”.

“Work on this is still going on. It is premature to talk about numbers,” a second euro zone official familiar with the talks said. Two other euro zone officials confirmed no amounts have been discussed yet.

The euro zone’s bailout fund, the European Financial Stability Facility, has uncommitted resources of around 250 billion euros, while the IMF’s lending capacity now is around $380 billion (283 billion euros).