The International Monetary Fund is planning to boost its lending resources by USD250 billion to build safety nets and mitigate financial shocks. The Washington-based lender is seeking commitments as early as November to increase its resources from USD750 billion to USD1 trillion.
Instead of conditional loan packages, the IMF seeks to reach financing agreements in advance that are tailored to the needs of individual countries.
“Even when not in a time of crisis, a big fund, likely to intervene massively, is something that can help prevent crises,” IMF Managing Director Dominique Strauss-Kahn said according to the Financial Times.
South Korea, as host of the G-20 summit in November, is helping to design the financing plan. Seoul hopes to convince the G-20 to give more funding to the IMF and has developed a plan that aims to avoid a repeat of its currency and stock market crash in 2008.
Despite robust economic fundamentals, South Korea needed to be rescued from a dangerous liquidity shortfall two years ago, the Financial Times report adds.