WASHINGTON, (Reuters) – The Group of 20 nations yesterday pledged $430 billion in new funding to the International Monetary Fund, more than doubling its lending power in a bid to protect the global economy from the euro-zone debt crisis.
The promised funds from advanced and emerging economies will provide the global lender with a huge war chest should the sovereign debt problems that have engulfed three euro zone countries spread and threaten a fragile recovery.
IMF Managing Director Christine Lagarde said the decision shows the determination of the international community to provide the IMF with the tools needed to resist and defend against crisis.
“This is extremely important, necessary, an expression of collective resolve,” she said.
“Given the increase that has just taken place, we are north of a trillion dollars actually. So I was a bit mesmerized by the amount,” said Lagarde.
