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发帖数: 1972 | 1 http://www.businessinsider.com/cnbc-imf-will-offer-huge-liquidi
The IMF will offer a credit line to allow sovereigns to access liquidity of
1000% of a member's quota for 1-2 years.
It will allow them to access up to 500% of their quota in liquidity on a 6-
month basis.
Both markets and the euro spiked immediately on the news.
The funds would be offered to sovereigns suffering from "exogenous shocks."
It is unclear whether the IMF actually has access to the amount of funds
that would be necessary to bail out a sovereign like Italy.
This press release from the IMF describes how the new program will work:
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The Executive Board of the International Monetary Fund (IMF) approved on
November 21 a set of reforms designed to bolster the flexibility and scope
of the Fund’s lending toolkit to provide liquidity and emergency assistance
more effectively to the Fund’s global membership. These reforms, which
have been under preparation for some time, will enable the Fund to respond
better to the diverse liquidity needs of members with sound policies and
fundamentals, including those affected during periods of heightened economic
or market stress—the crisis-bystanders—and to address urgent financing
needs arising in a broader range of circumstances than natural disasters and
post-conflict situations previously covered.
“I commend the Executive Board for the expeditious response to support the
membership in these difficult times,” said IMF Managing Director Christine
Lagarde following the Executive Board meeting. “The Fund has been asked to
enhance its lending toolkit to help the membership cope with crises. We have
acted quickly, and the new tools will enable us to respond more rapidly and
effectively for the benefit of the whole membership.
“The reform enhances the Fund’s ability to provide financing for crisis
prevention and resolution. This is another step toward creating an effective
global financial safety net to deal with increased global
interconnectedness,” she added.
The reform replaces the Precautionary Credit Line (PCL) with the more
flexible Precautionary and Liquidity Line (PLL), which can be used under
broader circumstances, including as insurance against future shocks and as a
short-term liquidity window to address the needs of crisis bystanders
during times of heightened regional or global stress and break the chains of
contagion. The Fund’s current instruments for emergency assistance (
Emergency Natural Disaster Assistance and the Emergency Post-Conflict
Assistance) are consolidated under the new Rapid Financing Instrument (RFI),
which may be used to support a full range of urgent balance of payments
needs, including those arising from exogenous shocks.
Key elements
The Precautionary and Liquidity Line:
Qualification criteria remain the same as under the PCL. A member needs to
be assessed as having sound economic fundamentals and institutional policy
frameworks, having a track record of implementing sound policies, and
remaining committed to maintaining such policies in the future. A member can
seek support when it has either a potential or actual balance of payments
need at the time of approval of the arrangement (rather than only a
potential need, as was required under the PCL).
Can be used as a liquidity window allowing six-month arrangements to meet
short-term balance of payments needs. Access under a six-month arrangement
would not exceed 250 percent of a member’s quota, which could be augmented
to a maximum of 500 percent in exceptional circumstances where the member
faces a balance of payments need that is of a short-term nature and results
from exogenous shocks, including from heightened regional or global economic
stress conditions.
Can also be used under a 12 to 24-month arrangement with maximum access
upon approval equal to 500 percent of a member’s quota for the first year
and up to 1000 percent of quota for the second year (the latter of which
could also be brought forward to the first year where needed, following a
Board review). As under the PCL, arrangements of these durations include
Executive Board reviews every six months.
The Rapid Financing Instrument:
The RFI broadens coverage of urgent balance of payments needs beyond those
arising from natural disasters and post-conflict situations, and can also
provide a framework for policy support and technical assistance.
Funds are available immediately to the member in need upon approval with
access limited to 50 percent of the member’s quota annually, and to 100
percent on a cumulative basis.
The member needs to outline its policy plans to address its balance of
payments difficulties, and the IMF must assess that the member will
cooperate in finding solutions for these difficulties.
Review of Flexible Credit Line and PCL:
The Executive Board also reviewed the FCL and PCL and found that that these
instruments have bolstered confidence and moderated balance of payments
pressures during a period of heightened risk. The rigorous qualification
framework has worked well and access decisions have reflected the evolution
of risks facing users of these instruments. The review calls for focusing
qualification discussions more on qualitative and forward-looking aspects of
policies and policy frameworks, and enhancing the transparency of access
decisions.
Read more: http://www.businessinsider.com/cnbc-imf-will-offer-huge-liquidity-program-to-stem-contagion-2011-11#ixzz1eSKJz5ia |
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