This website uses cookies to ensure you have the best experience. Learn more

Imf Raising Extra Lending Capacity Essay

612 words - 3 pages

Article Summary Assignment
The Author’s Opinion on IMF Raising Extra Lending Capacity
Brief Summary of the Article (150)
According to New York Times, the International Monetary Fund (IMF) announced altogether with its sister institution World Bank that they raised more than $430 billion and expanded their lending capacity, in the afternoon on Apr. 20, 2012.
The contribution came mostly from the developed economies such as Japan, Britain, Saudi Arabia and South Korea.
Some emerging countries such as Brazil, India, Russia and China did not make particular commitments or detailed exact dollar amounts. They were supposed to clarify the precise decision after obtaining advice and orders from their governments.
The United States considered Europe’s problems were of its own to deal with and that the it was not necessary for IMF to raise extra lending capacity and contended to contribute no more dollars.
Another issue the author found interesting ...view middle of the document...

In term of economy development, once the sovereign credit rating of a country deteriorates and meanwhile increases the difficulty for the recovery of the real economy. Businesses may find it hard to refinance and threatened by funding strands breaks. Besides, firms devoted to international trade may be faced with a worsened situation and accordingly revenues will be reduced.
To avoid these unfavorable impacts, proper measures should be taken immediately and help the economies to bottom out.
In effect, several economies in the Europe may find themselves hardly able to make a change from the facts. IMF, as an international institution to balance and promote the economic development, is responsible to assist with the obstacles. Though delegates from America doubted the necessity of raising new fund to increase the lending ability of the Fund which might be true, worldwide response, in the author’s opinion, was more than welcomed.
The author found it was reluctant to agree that the sovereign crisis is problem that should be taken care just depending on the Europeans. On the ground of international business and the world’s becoming flattened, no state can survive without a bruise if the euro zone cannot make it.
The nations developing at a rapid grow rate stated their commitments and claimed a larger voting share. It is of the author’s opinion that such a rearrangement of voice may help with legitimacy in fund distribution. The undeveloped economies have an equal right to enjoy economic prosperity and by controlling the usage of the fund one can give a great push to the economic growth, domestically and overseas. For example, the state can adopt a strategy that they can ask the recipient to spend the contributed money on products and services generated by the donor. In this way, both the contributor and the receiver will benefit from the action of aid.
In conclusion, the author supports the new pledges of assistance and the claim of stronger voice of the emerging world.

Borensztein, E. (2004). Sovereign debt structure for crisis prevention, Intl Monetary Fund
Mankiw, N. G. (2007). Macroeconomics, Worth Publishers, 6th ed.

Other assignments on Imf Raising Extra Lending Capacity

Federal Reserve Essay

3001 words - 13 pages directly alter the lending capacity of any banking system. A decrease in the ratio will allow the bank to lend more, thereby increasing the supply of money. An increase in the ratio reduces the lending capacity in the banking system. Any change of the reserve requirement may result in excess reserves, money multiplier and lending capacity of financial institutions. With excess reserves, the money multiplier determines how many additional loans a

Reform Of Public Sector In Solomon Islands - Siwa & Siea

7276 words - 30 pages urban, the capacity to provide service efficiently with a low cost is a continuous struggle. With respect to past history of debt of SIWA and SIEA, their low level of profitability and poor financial record of balance sheets would argue for cautious approach on lending and borrowing. (Solomon Island Government, 2013). Hence, state needs to adopt sticker policy on maintenance and monitoring system of the SOEs performance and have more

Project Financing

4101 words - 17 pages . 3. To exchange deposits for bills of exchange, govt. bonds, the secured and unsecured promises of trade and industrial units. 4. To underwrite capital issues. They are also allowed to invest 5% of their incremental deposit liabilities in shares and debentures in the primary and secondary markets. 5. The lending or advancing of money either upon securities or without securities. 6. The borrowing, raising or taking of money

Hnd Business Level 5

1321 words - 6 pages having the capacity to adjust to economic situations. Inventive capacity in making items and adjusting showcasing to contend well the target market. The capacity to become rapidly, for instance with extra limit close by. Fit with government concerns, for example, lower vitality utilization. . Industry/market attractiveness The allure of the business shows the attractive quality for the Hiscox organization to enter and contend inside every

Co-Relation Of Growth And Inflation In India & China

3147 words - 13 pages prices and built-in inflation (linked to price-wage spiral) worsens lead to Philips Curve move in a stagflationary direction leading to higher unemployment and higher prices. In case, when the growth rate is below the potential output level and the rate of unemployment is above the natural rate, the suppliers increases the capacity leading to fall in prices as well as fall in unemployment – movement of the Philips Curve in the desired direction

The 2008 Financial Crisis

7080 words - 29 pages its worst economic downturn since the Great Depression. The crisis began in the year 2006 with the housing market, particularly the markets of subprime mortgages, prime mortgages, real estate, and finally made its way into the commercial market, corporate bonds, and various other debt types (Bezemer, 2011; Battiston, 2007). Owing to that, the banks in the U.S garnered losses of more than one trillion which lead to a steep decline in lending and

Economic Growth

3680 words - 15 pages in Bangladesh Trade liberalization policies pursued by Bangladesh have passed through three phases. The first phase (1982-86) was undertaken as Bangladesh came under the purview of the policy based lending of the World Bank; the second phase (1987-91) began with the initiation of the three year IMF structural adjustment facility (SAF) in 1986; and finally, the third phase since 1992, was preceded by the IMF sponsored Enhanced Structural Adjustment

Proposal Of A Global Microfinance Financial Authority Mechanism

3610 words - 15 pages detrimental to the capacity of the MFIs to repay foreign currency debt. Such incapacity increases peril of bankrupcies. While the lending in hard currency protects investors, it shifts the FX risk to MFIs, employing the hard currency debt to fund microcredit portfolios denominated in local currency. As the number of MFIs that rely on commercial sources of funding grows and volatility of local currencies in the past two years increased, taking its toll

Assignment/ Research Writing

9344 words - 38 pages , by satisfying customers, firms and MFIs will lower their actual costs avoiding gaining new clients and making extra marketing expenses.  This argument is more important in microfinance sector where clients and the MFI are supposed to act for a long-term relationship.  In fact, “ with client retention, institutional costs decrease as the institution needs to do less marketing, less new client orientation, and fewer new client background checks

Microeconomics - Basics

1216 words - 5 pages applied to a given quantity of a fixed factor, there is a point beyond which the extra output from add. Units of factor will eventually diminish - output will eventually increase by a smaller amt - fixed factor will be used up - overcrowding FOP due to worsening factor combination FIXED COST - even if output is 0 TOTAL FIXED COST - sum of all COP that do not vary with level of output (overhead costs) AVERAGE FIXED COST - amt of fixed


7578 words - 31 pages consumers around the globe. This growth has provided consumers more choice, reduced product cost and price, and increased fostered innovation in response to greater competition. Protectionism, defined as is the ability of nations to impose limits on goods and services by raising barriers to trade and foreign investment, poses a significant risk to the industry. These often nationalistic measures take on various forms including restrictions on

Similar Documents

Euro Crisis Essay

2783 words - 12 pages European Council fails to reach an agreement on how to extend the EFSF/ESM’s ceiling to €500 billion (in 2012 alone the PIIGS governments have to service €651 billion). The Finnish Parliament votes against a clause that authorises the use of the EFSF/ESM in an emergency without adequate intergovernmental consultation. Together with the double EFSF downgrade, investors become more sceptical about the EFSF’s capacity to rescue the PIIGS. The IMF

Greece Debt Crisis Essay

2431 words - 10 pages strategy like austerity, reducing public spending…, Greece situation did not improved. To help Greece improve its situation, the IMF and Eurozone governments sealed a deal for two bailouts in 2010 and 2012, totalling €240 billion. On July 5, 2015 the majority of Greek citizens voted to reject the Europe’s plan to bail out the country’s economy, which caused the fear about the potential exit from the European Union, Greece’s future and world economy

Director Essay

1042 words - 5 pages ]  Extremely volatile oil prices were a major outcome of the global financial crisis The supply and consumption decreased due to the economic slowdown of our economy. This was caused as a result of inflation that was caused by high oil prices and adversely affected our country's Industrial sector. Reduction in refining capacity of different refineries due to a major increase circular debt Significant increase in import of oil in the country

Current Situation Of Inflation In Bangladesh

8353 words - 34 pages their help in preparing this report. List of Acronyms * AS- Aggregate Supply * FY- Fiscal year * CPI- Consumer Price Index * BB- Bangladesh Bank * GDP- Gross Domestic Product * BBS- Bangladesh Bureau of Statistics * IMF- International Monetary Fund * CIA- Central intelligence Agency * ADB- Asian