Ahead of the G20 meeting of finance ministers over the next two days and the spring semi-annual session of the IMF on Saturday, Managing Director Lagarde was rejoicing yesterday at the extra USD 320bn of pledges she had received to fill the Fund’s coffers. Europe has already claimed it will provide an additional USD 200bn, Japan announced earlier this week that it was good for another USD 60bn, Switzerland has vowed to throw in ‘a substantial amount’ and Poland has committed to USD 8bn. The Scandi countries have also been generous – Sweden will put in USD 10bn, Denmark USD 7bn and Norway USD 9.3bn. Critically, neither the United States nor Canada has agreed to contribute extra funds – both believe that Europe could and should do more to shore up its own financial firewall.
Against the backdrop of the IMF’s dire warning for European bank-deleveraging contained in its latest Global Financial Stability Report, clearly Lagarde recognises the urgency of stockpiling as much financial resources as possible should there be another damaging bout of contagion emanating from Europe.