March 25, 2011
IMF bracing for financial tsunami
from Dow Jones:
Activating access to the funding pool could provide assurance to the market of the IMF's ability to backstop any major funding crisis amid ongoing fears that Europe's sovereign debt woes will worsen. The IMF board recently approved a boost to the so-called New Arrangements To Borrow, bringing the special pool of funding to around $580 billion, adding several hundred billion dollars to the total amount the fund has to tap. According to the IMF, the pool of supplementary resources are only to be activated when "needed to forestall or cope with a threat to the international monetary system."
Although no request has been made, markets, analysts and economists say rejection by the Portuguese parliament Wednesday of a belt-tightening budget all but sealed the likelihood Lisbon will request aid from the IMF and the European Union.