## IMF Survey: G-20 Reaffirms IMF's Central Role in Combating Crisis

_IMF News, April 3, 2009_

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## Bibliographic details
- Published: April 3, 2009

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### Overview
- The G-20 reaffirmed the IMF’s central role in the international financial system at the London summit on April 2, agreeing to triple the Fund’s lending capacity to $750 billion and enabling it to inject extra liquidity into the world economy.
- The G-20 mandated the IMF to make a new general allocation of SDRs which will inject $250 billion into the world economy and increase global liquidity.
- The summit set a target to more than double concessional lending resources for low-income countries.

### IMF roles emphasized by the G-20 and Managing Director Dominique Strauss-Kahn
- Economic forecaster
  - IMF economic forecasts were described as the central reference point for countries planning how to respond to the crisis.
  - The IMF is forecasting that the global economy will recover in 2010, but only if the right policy actions, including a coordinated fiscal stimulus, are taken.
- Policy advisor
  - The IMF pressed for a coordinated response through cuts in interest rates, big increases in government spending, cleaning up the financial sector, and bolstering regulation.
  - The IMF became a partner for governments to discuss policies and analyze effective policy responses to the crisis.
- Economic surveillance
  - The IMF will monitor policy implementation by governments and was asked to beef up early warning systems, along with the Financial Stability Forum.
  - The G-20 communiqué: “We call on the IMF to assess regularly the actions taken and the global actions required.”
  - Strauss-Kahn: “Our global and country monitoring procedures are being sharpened, including with a new mechanism for early warnings.”
- Global lender
  - The resources the IMF has to support its members will be tripled to $750 billion, including $100 billion each from Japan and the European Union.
  - The IMF will use the money to buttress countries affected by the global downturn.
  - Example: Mexico is seeking $47 billion in a precautionary credit line from the IMF.
  - The IMF announced changes in lending policy to make it more flexible.
- Provider of help to low-income countries
  - The summit set a target to more than double concessional lending to the world’s poorest countries.
  - Strauss-Kahn reaffirmed the IMF commitment made in Dar es Salaam to be the voice for low-income countries at the G-20.

### Resources, liquidity, and SDRs
- G-20 decision: triple the IMF's war chest to $750 billion.
- G-20 backing for IMF to effectively create an additional $250 billion by issuing "special drawing rights," or SDRs.
- Strauss-Kahn: the $250 billion SDR allocation is “the beginning of increasing the role of the IMF” in providing liquidity to the world.

### Gold sales and concessional financing for poorest countries
- The communiqué said the IMF would use part of the proceeds of a previously proposed sale of gold to provide concessional financing for low-income countries.
- A move to sell gold requires support by 85 percent of the Fund’s executive board and legislative action by several member countries.
- The proposal agreed last year was to sell 403.3 metric tonnes of IMF gold as part of a plan to bolster the Fund’s income.
- The G-20 communiqué: “We have committed, consistent with the new income model, that additional resources from agreed sales of IMF gold will be used, together with surplus income, to provide $6 billion additional concessional and flexible finance for the poorest countries over the next 2 to 3 years. We call on the IMF to come forward with concrete proposals at the Spring Meetings.”

### Governance and representation reforms
- The G-20 committed to implementing the package of IMF quota and voice reforms agreed in April 2008.
- The G-20 agreed to bring forward a further review of quotas by January 2011.
- The G-20 agreed to consider greater involvement of the Fund’s Governors in providing strategic direction and increasing accountability.
- The G-20 agreed that heads and senior leadership of the international financial institutions should be appointed through an open, transparent, and merit-based selection process.

*Source: IMF Survey: G-20 Reaffirms IMF's Central Role in Combating Crisis (IMF Survey online, April 3, 2009).*

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## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [In The News](https://www.imf.org/en/news/search)
- [Hear Strauss-Kahn podcast](https://www.imf.org/external/mmedia/view.asp?eventID=1431)
- [IMF revamps lending](https://www.imf.org/external/pubs/ft/survey/so/2009/NEW032409A.htm)
- [Crossroads at G-20 summit](https://www.imf.org/external/pubs/ft/survey/so/2009/POL032709A.htm)
- [IMF to track crisis response](https://www.imf.org/external/pubs/ft/survey/so/2009/NEW031409A.htm)
- [Lending reforms Q&A](https://www.imf.org/external/np/exr/faq/facfaqs.htm)
- [IMF key issues: lending](https://www.imf.org/external/np/exr/key/lending.htm)
- [Changing IMF combats crisis](https://www.imf.org/external/pubs/ft/survey/so/2009/INT022609A.htm)
- [IMF aims to double resources](https://www.imf.org/external/pubs/ft/survey/so/2009/POL020209A.htm)
- ["special drawing rights,"](https://www.imf.org/external/np/exr/facts/sdr.htm)
- [conference in Tanzania](https://www.imf.org/external/pubs/ft/survey/so/2009/NEW031109A.htm)
- [Quotas](https://www.imf.org/external/np/exr/facts/quotas.htm)
- [sale of gold](https://www.imf.org/External/NP/EXR/faq/goldfaqs.htm)
- [Spring Meetings](https://www.imf.org/external/spring/2009/index.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/28/04/53/sonew040309a_