More Money for the IMF?

By Bob Davis

With the prospect growing that the International Monetary Fund may need to help bail out euro zone countries beyond Greece, the IMF may find itself short of money to handle those crises– and others that may arise elsewhere in the world.

The so-called BRICS countries — China. Russia, India, Brazil and South Africa — are weighing whether to lend the IMF additional funds to quell doubts that fund could get overwhelmed.

The question of whether “I can provide support and some liquidity to the IMF is on my mind,” said Yi Gang, deputy governor of China’s central bank, who is in charge of investing China’s $3.2 trillion in foreign reserves. Mr. Yi was speaking at IMF panel on Thursday during the IMF’s annual meeting

Later in the day, the BRICS issued a joint statement saying they recognize the need for new sources of financing as developed economies struggle.

During the first round of the global financial crisis, when the IMF looked like the IMF might not have enough money, Japan stepped up with a $100 billion loan. That eventually led to other nations reaching deeply into their pockets too. The additional funding helped sooth market apprehensions.

Japanese finance minister Jun Azumi said, in an interview, that japan was again ready to lend to the IMF, if necessary.

“If it becomes inevitable and necessary to provide additional funding then of course we will supportively think about it,” Mr. Azumi said.

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