Doubt greets IMF bailout offers
The fund seeks to soften effects of the financial collapse, but many Asian leaders – citing bad advice from the '97 crisis – are wary of conditions attached to assistance.
As the global credit crunch bites hard, the list of countries seeking emergency aid from the International Monetary Fund grows ever longer: Hungary, Ukraine, Iceland. This scramble for funds has raised questions over the size of the IMF's war chest for further bailouts as more developing countries run short of hard currency.
The IMF says it has $200 billion in reserves and can tap an additional $50 billion credit line. At last weekend's G-20 summit in Washington, billed as an effort to recast global financial institutions for a new era, calls for a topping-off largely fell on deaf ears, with only Japan pledging an additional $100 billion.
IMF officials have warned that the latest loan package for Iceland, finalized Wednesday, won't be the last in what it calls a deep global crisis.
More money will likely be found, says Edwin Truman, a senior fellow at the Peterson Institute for International Economics in Washington. "In the end, they will get the money. The [global financial] system will not let the fund run out of money," he says.
[An IMF spokesperson in Tokyo declined to comment on funding commitments.]
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