The International Monetary Fund has announced that it will make an effort to boost its lending power to $ 1 trillion this November. The Group of 20 Summit in South Korea will consider this request. By increasing its ability to give emergency cash advance loans money to countries in trouble, the IMF hopes to improve their response to financial crisis.
Lending capabilities of the IMF
The IMF currently has a lending capacity of about $ 750 billion. Most often, this money is distributed as cash advance loans to struggling countries. The money is usually used to help stabilize banks and financial systems, take on system-wide reforms, and purchase upgrades for infrastructure. It is very rare for a first-world country to get a loan through the IMF. Though they are technically able to take the money, many first-world countries are not taking the cash til payday loan in order to stay away from appearance of instability.
Getting more money to lend
The IMF is funded by a large group of countries that also governs it. Most of these countries could be attending the G-20 summit in November. If the IMF is of course an additional $ 250 billion in lending power, these countries will be on the hook. While the IMF doesn’t have a banking account with $ 750 billion sitting in it, the countries that make up the IMF are responsible for providing the money.
The conditions put on IMF loans
You will find various strings attached to a fast cash loans provided by the IMF. If a country gets an IMF loan, it has to undertake reforms. The reforms required by the IMF are the jumping-off point for some significant controversy. Some claim the fast loans given by the IMF end up doing more harm than good. More money for lending would mean more loans and conditions from the IMF. There is a lot of debate, though, on if the world economy would really benefit.
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