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Entries in IMF (8)

Sunday
Oct142012

Bernanke Defends Fed's Stimulus Measures 

Mark Wilson/Getty Images(NEW YORK) -- Federal Reserve chairman Ben Bernanke says the bank's stimulus measures have helped the global economy, in spite of criticism from abroad, the BBC reports.

Brazil has criticized the United States for keeping interest rates low and weakening the dollar, saying that such measures has hurt emerging economies. Christine Lagarde, chief of the International Monetary Fund, also warned Sunday of asset bubbles consequently developing in emerging nations. But Bernanke defended the Fed's actions by saying the moves have boosted the global economy, the BBC says.

The Fed has kept a low interest rate policy for several years, pumping over $2 trillion into the national economy to encourage growth, according to the BBC.

Copyright 2012 ABC News Radio

Tuesday
Oct092012

International Monetary Fund Lowers Global Growth Forecast for 2012

Comstock Images/Thinkstock(NEW YORK) -- More than ever the U.S. is part of the global economy, with millions of American workers depending on jobs linked to imports and exports.  

But a new warning that the world's economy has weakened further could mean a slowdown for global trade and the biggest threat out there to American jobs.

In its latest update, the International Monetary Fund forecasts global growth of 3.3 percent this year -- down from an estimate of nearly 4 percent just three months ago.  Slower growth is also forecast for 2013.

"Risks for a serious global slowdown are alarmingly high," says the IMF's World Economic Outlook.

The report comes one day after a forecast of a deepening slowdown in China, the world's second largest economy.  India -- another engine of growth -- is also facing a serious slowdown. 

Copyright 2012 ABC News Radio

Sunday
Aug282011

IMF Chief Lagarde Urges for Coordinated Policy at Jackson Hole

Bloomberg/Getty Images(JACKSON HOLE, Wyo.) – IMF Chief Christine Lagarde urged the United States to take action to save the European economy at a U.S. Federal Reserve meeting in Jackson Hole on Saturday.

Lagarde warned that the global economy has not recovered at a sufficiently smooth pace. She requested that the U.S. and the E.U. coordinate their economic policies.

The speech was Lagarde’s first major appearance since taking over the IMF in July following the Dominique Strauss-Kahn scandal.

Copyright 2011 ABC News Radio

Saturday
Jul092011

IMF Approves $4.6 Billion Loan Payment to Greece 

Paul J. Richards/AFP/Getty Images(WASHINGTON) -- The International Monetary Fund approved a $4.6 billion payment to Greece under a joint loan with the European Union Friday.

This effort is part of the most recent installment of a rescue package aimed to assist the country’s recovery from an imminent debt default, while buying policy makers time to develop a second rescue package.

European finance ministers authorized the unblocking of 8.7 billion euros last week as discussions continued on how to include banks and insurers in a new package for Greece, which can’t return to markets next year due to surging borrowing costs. The option of involving the private sector has been criticized by the European Central Bank because it could trigger a partial default.

The IMF, whose loan to Greece under the initial joint 110- billion-euro package is the second-highest in fund history, hasn’t publicly discussed its participation in a second bailout.

Copyright 2011 ABC News Radio

Wednesday
Jul062011

New IMF Director: Economy Still Fragile

Brendan Smialowski / Getty Images(WASHINGTON) -- The International Monetary Fund's new managing director, Christine Lagarde, said Wednesday that while the world's economy is improving, it remains fragile.

"When we look at our growth forecasts for 2011, 2012, we are clearly on the rebound and things are improving and are getting better when compared with the situation as it was in 2009 at the height of the crisis," Lagarde said at her first news conference as the IMF's new leader.

During the conference, Largarde outlined her vision for the IMF, identifying the debt crisis in Greece as the first issue she will address.

Lagarde succeeded Dominique Strauss-Kahn who resigned in May following allegations of sexual assault in New York. Lagarde would not comment on her predecessor's legal troubles.

Copyright 2011 ABC News Radio

Monday
May232011

Ireland's Financial Collapse: Is the Worst Over?

PETER MUHLY/AFP/Getty Images(DUBLIN) -- The public focus of President Obama's first presidential visit to Ireland is standard fare: he and the prime minister reaffirmed the U.S.-Irish relationship, and the president took in a visit to the small town of Monegall, where his maternal great-great-great grandfather was born.

But behind the delighted squeals of the crowd is an economic catastrophe that the president and the world will have to address.

In the wake of Ireland's financial collapse, the European Union and the International Monetary Fund gave Ireland a $121 billion loan in November. On Friday, the IMF warned that despite that bailout, Ireland's financial situation may worsen still.

"For policy matters that are under their control, the Irish authorities have been decisive and are doing all they can to get ahead of their problems," Ajai Chopra, IMF mission chief to Ireland, said last week. "But we do need to recognize that they may not be sufficient."

The IMF said that the EU needed a new "comprehensive plan" for Ireland and other struggling European countries.

Ireland's debt accounted for roughly a quarter of its economy. Then the nation was hit by severe housing and credit crises. The debt is now larger than its economy.

In their public remarks at Farmleigh House in Dublin this morning, Irish Prime Minister Kenny said he had explained to President Obama "the seriousness of which Ireland and its new government -- thereby myself and the presence here of the Oireachtas -- are dealing with the issues that affect our country -- the banks and the economic situation and our seriousness of intent in dealing with our budget deficit; also in conjunction with the conditions of the IMF bailout, dealing with the situation there.  And we expressed appreciation for the general support of America in that regard."

President Obama said he was "glad to see that progress is being made in stabilizing the economic situation here.  I know it's a hard road, but it's one that the Irish people are more than up to the task in achieving."

Amidst the severe austerity measures the government has had to impose -- reducing health benefits, cutting pensions, laying off workers -- Irish eyes are not smiling. Unemployment remains around 15 percent.

Copyright 2011 ABC News Radio

Monday
May162011

What is the International Monetary Fund?

JEWEL SAMAD/AFP/Getty Images(WASHINGTON) -- The organization headed by Dominique Strauss-Kahn is one of the most important but least understood players in the world of international finance.

The International Monetary Fund is an inter-governmental organization charged with keeping the global financial system intact and functioning. Founded after World War II to build a working international system for currency exchange and to avert economic crises, the Washington, D.C.-based IMF currently counts some 187 countries amongst its membership.

The Fund has deposits from member countries -- commonly called "quotas" -- totaling some $340 billion, with additional commitments for about $600 billion from member governments should the funds be needed. Quota requirements are determined by the size of the member country's economy. So the United States, with a $14 trillion GDP, is the biggest contributor with about 18 percent of the quotas.

They provide loans to member countries which are facing currency shortfalls or economic trouble. The most recent administrative report, out at the end of January, shows that the IMF has about $254 billion in loans committed today (only $64 billion of which has actually been deployed). The biggest borrowers are Romania, Ukraine, and Greece.

These loans come with strings attached. Typically, a country could get assistance from the IMF, but it would be required to embark on a series of monitored economic reforms over a period of years.

The organization says it funds its administration and overhead through the interest borrowing states pay on the loans they take.

In addition to actual loans, the IMF provides standardized economic data and statistics, surveillance of current economic conditions, and consultation for member countries facing economic hardship.

The organization, which has seen Europeans in the top leadership spot of its Executive Board since its founding in the 1940s, has representatives from every member country on its Board of Governors, which meets once a year. The IMF is currently undergoing a series of reforms which would make appointments to its top executive positions more democratic.

Copyright 2011 ABC News Radio

Sunday
Nov282010

Eurozone Approves $113 Billion Bailout for Ireland

Photo Courtesy - PETER MUHLY/AFP/Getty Images(BRUSSELS, Belgium) -- The European Union on Sunday approved an 85 billion euro or $113 billion dollar deal to help stave off an economic meltdown for Ireland.  The money will come from the International Monetary Fund, the 16 nations within the Eurozone and the European Commission. 

Ireland will be allowed to take money from its pension funds to make up its part of the EU commitment.  That had been against Eurozone rules. The EU has also agreed to set up a system by which a country deemed insolvent can restructure its debt. 

Ireland will have up to seven and a half years to pay back its loans -- longer than the three years allowed to Greece in its bailout deal arranged last May.

Copyright 2010 ABC News Radio