The GAB and NAB are credit arrangements between the IMF and a group of member countries and institutions to provide supplementary resources of up to SDR 34 billion (about US$53 billion) to the IMF to forestall or cope with an impairment of the international monetary system or to deal with an exceptional situation that poses a threat to the stability of that system.

Agreement to triple the IMF's lending resources by expanding the NAB

On April 2, 2009, the Group of Twenty industrialized and emerging market economies (G 20) agreed to increase the resources available to the IMF by up to $500 billion (which would triple the total pre-crisis lending resources of about $250 billion) to support growth in emerging market and developing countries. This broad goal was endorsed by the International Monetary and Financial Committee in its April 25, 2009 communiqué. This resource increase is to be made in two steps:

• first, through immediate bilateral financing from IMF member countries
• second, by subsequently incorporating this financing into an expanded and more flexible NAB increased by up to $500 billion. On September 25, the G-20 announced it had delivered on its promise to contribute over $500 billion to a renewed and expanded IMF New Arrangements to Borrow (NAB).

Six countries have already signed bilateral loan agreements with the IMF worth US$169 billion. China has also signed a $50 billion bilateral note purchase agreement, and the list is still growing. In addition, NAB representatives have already agreed on many reform elements to make the NAB more flexible and progress towards a final agreement is expected in the near future.

Why the GAB was established and how it works

The GAB enables the IMF to borrow specified amounts of currencies from 11 industrial countries (or their central banks), under certain circumstances, at market-related rates of interest. The potential amount of credit available to the IMF under the GAB totals SDR 17 billion (about $27 billion), with an additional SDR 1.5 billion available under an associated arrangement with Saudi Arabia.

The GAB, established in 1962, has been renewed ten times, most recently in November 2007 for a five year period from December 2008. In response to the growing pressures on the IMF's resources caused by the emergence of the debt crisis in Latin America in 1982, a broad review was undertaken in 1983. It resulted in a substantial increase in the credit lines, from about SDR 6 billion to SDR 17 billion. Other major amendments to earlier GAB provisions permit the IMF to use it to finance lending to nonparticipants in the GAB, if the IMF faces a situation where it has inadequate resources of its own. The earlier GAB carried a rate of interest below market rates; this rate was raised at the time of the GAB enlargement and made equal to the SDR interest rate.

GAB Participants and Credit Amounts

	Original GAB (1962 -1983)	Enlarged GAB (1983 – 2008)
Participant	Amount (SDR million1)	Amount (SDR million)
Belgium	143	595
Canada	165	893
Deutsche Bundesbank	1,476	2,380
France	395	1,700
Italy	235	1,105
Japan2	1,161	2,125
Netherlands	244	850
Sveriges Riksbank	79	383
Swiss National Bank		1,020
United Kingdom	565	1,700
United States	1,883	4,250
Total	6,344	17,000
Saudi Arabia (associated credit arrangement)		1,500
1 SDR equivalent as at October 30, 1982 2250,000 million yen entered into effect on November 23, 1976 Note: Total may not equal sum of components due to rounding.

NAB established to supplement GAB resources

The NAB is a set of credit arrangements between the IMF and 26 member countries and institutions. It was proposed at the 1995 G-7 Halifax Summit following the Mexican financial crisis. Growing concern that substantially more resources might be needed to respond to future financial crises prompted participants in the Summit to call on the G-10 and other financially strong countries to develop financing arrangements that would double the amount available to the IMF under the GAB. The IMF's Executive Board adopted a decision establishing the NAB, with effect from November 1998.

The NAB have been renewed twice, most recently in November 2007 for a further period of five years from November 2008.

Importantly, the NAB is the facility of first and principal recourse vis-à-vis the GAB except in limited circumstances (involving Fund credit to a member that is a participant of both the GAB and NAB, or where a proposal for calls under the NAB is not accepted). The maximum amount of resources available to the IMF under the NAB and GAB is SDR 34 billion (about $53 billion).

Commitments from individual participants are based predominantly on relative economic strength, as measured by IMF quotas. An IMF member country or institution that is not currently a participant in the NAB may be accepted as a participant at the time of a renewal of the decision, if the IMF and participants representing 80 percent of the total credit arrangements agree. Chile's participation in the NAB was approved in 2002 at the time of its first renewal. New participants may also be accepted at other times under certain circumstances.

NAB Participants and Credit Amounts

Participant	Amount (SDR million)
Australia	801
Austria	408
Banco Central de Chile	340
Belgium	957
Canada	1,381
Denmark	367
Deutsche Bundesbank	3,519
Finland	340
France	2,549
Hong Kong Monetary Authority	340
Italy	1,753
Japan	3,519
Korea	340
Kuwait	341
Luxembourg	340
Malaysia	340
Netherlands	1,302
Norway	379
Saudi Arabia	1,761
Singapore	340
Spain	665
Sveriges Riksbank	850
Swiss National Bank	1,540
Thailand	340
United Kingdom	2,549
United States	6,640
Total1	34,000
1 Total may not equal sum of components due to rounding

How the GAB and NAB are used

A proposal for calls on the GAB or the NAB by the IMF's Managing Director can become effective only if it is accepted by their participants, and the proposal is then approved by the IMF's Executive Board.

The NAB has been activated once—to finance a Stand-by Arrangement for Brazil in December 1998, when the IMF called on funding of SDR 9.1 billion, of which SDR 2.9 billion was used.

The GAB has been activated ten times. The last time was in July 1998 for an amount of SDR 6.3 billion in connection with the financing of an Extended Arrangement for Russia. Of that amount, SDR 1.4 billion was used. Both activations were terminated in March 1999, when the Fund repaid the outstanding amounts following payments of quota increases under the Eleventh General Review of Quotas and the improvement in the Fund's liquidity position.