The IMF is to overhaul its lending facilities in an attempt to propel more money into emerging market countries and lessen the stigma attached to tapping the fund.
Spurred into action by growing strain in emerging markets and calls from the G20 for the fund to take a bigger role in the crisis, the IMF said yesterday it would bring in a new lending facility and modify the conditions and repayment structure for its other loans.
The new “flexible credit line” facility would act like an insurance policy: countries would sign up to the fund for a fee, but only choose to access money when they needed it. The IMF wants the facility to be largely preventative, encouraging countries to draw on its money early rather than waiting until a full-blown crisis drives them into the hands of the lender of last resort.