IMF Gets $600 Billion Credit Line to Help in Financial Crises

Nov. 25 (Bloomberg) -- The International Monetary Fund said it will have access to a credit line of up to $600 billion to make loans during financial crises after contributing countries agreed to fold commitments into one pool.

The agreement, yet to be approved by the IMF board, adds as many as 13 members from the current 26 to the so-called New Arrangements to Borrow, including emerging nations China, Russia, Brazil and India, the IMF said in an e-mailed statement.

The decision “marks an important moment for multilateralism and the fund, which will help the IMF’s effectiveness in its response to crises,” Managing Director Dominique Strauss-Kahn said in yesterday’s statement.

The deal goes beyond a pledge by leaders of the Group of 20 nations to contribute up to $500 billion to a credit arrangement that’s currently worth $54 billion, the IMF said. The worst financial crisis since the Great Depression prompted more nations to seek aid from the fund, created after World War II to help ensure the stability of the global monetary system.

The agreement, which merges existing commitments into one facility, makes it easier for the IMF to tap into its supplemental resources. The credit line will be “an effective tool of crisis management as a backstop for the international monetary system,” the IMF statement said.

While a general agreement on the NAB was reached at the G- 20 meeting in Pittsburgh in September, talks on the specifics stalled over divisions between some emerging and developed nations over voting rights relating to the credit facility.

Borrowed From Members

The IMF has estimated that its current credit line was insufficient when the financial crisis boosted demand for loans. It then started to borrow from individual members, such as Japan, to continue lending to countries in difficulty.

To ensure the institution would continue shoring up economies around the world, G-20 leaders in April pledged to add $500 billion to the IMF’s resources.

Some of these contributions were bilateral loans, while China agreed to participate by buying the first IMF notes. Some countries, like the U.S., made theirs directly to the NAB.

When the new credit-line agreement is activated, all the bilateral loans will fall into it, Andrew Tweedie, who heads the IMF Finance Department, said in a Nov. 20 interview. It won’t come into effect before next year, he said.

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Asia Stock Market Holidays / Trading Calendar in Year 2011

Asia Stock Market Holidays / Trading Calendar

in

Year 2011

Click on 'Country' as shown below for Market Holiday's schedule.

Australia


China


Hong Kong


India


Indonesia


Japan


Malaysia


New Zealand


Philippines


Singapore


South Korea


Taiwan


Thailand


Vietnam

India to Be $2 Trillion Economy By 2014-15, Economic Times Says

Nov. 17 (Bloomberg) -- India will be a $2 trillion economy in the next five years as its GDP is driven by an increase in consumption demand, the Economic Times reported, citing research from Enam Securities.

India will average 12 percent economic growth a year in nominal terms to 2014-15, boosted by consumption in the power, auto, information technology and pharmaceutical sectors, the report said, citing the research.

Related articles 

India Poised to Emerge Strong from the Global Crisis with GDP Growth of 7.5% (newswire.ca)

Warren Buffett: The financial panic is over

NEW YORK (Reuters) – Warren Buffett, perhaps the world's most admired investor, said on Thursday the financial panic that gripped the globe last year is a thing of the past, even as the U.S. economy's struggles persist.

"The financial panic is behind us," the world's second-richest person said at Columbia University's business school. "Our economy was sputtering, still is sputtering some."

Buffett, 79, nevertheless said there is greater opportunity for investments inside the United States than outside, noting that the U.S. economy is far larger than any other.

He appeared at Columbia with Microsoft Corp (MSFT.O) founder Bill Gates, the world's richest person and a Buffett friend and bridge partner.

Last month, preliminary government data showed the U.S. economy expanded in the third quarter, the first three-month period of growth since the second quarter of 2008.
Nonetheless, the U.S. unemployment rate last month reached 10.2 percent, the first double-digit reading in 26 years.

Buffett last week made a big bet on the U.S. economy when his Berkshire Hathaway Inc (BRKa.N) (BRKb.N) agreed to pay about $26.4 billion for the 77 percent of railroad company Burlington Northern Santa Fe Corp (BNI.N) that it did not already own.

"There will be more people in this country, 10, 20, 30 years from now," Buffett said. "They'll be moving more and more goods back and forth to each other and the most environmentally friendly and cost-efficient way of doing that is railroads."

Buffett said rail transport uses one-third less fuel and pollutes the air less than trucks, and that one train can supplant about 280 trucks.

Gates, who is also a Berkshire director, said other sectors might also boost the economy over the long term, including information technology, energy and medicine.

Separately, Buffett advised the U.S. government not to coddle companies that need bailouts to survive or preserve capital.

"More sticks are called for," he said.

Buffett gave Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Timothy Geithner "high marks" for how they managed the financial crisis.

The billionaire has praised Bernanke in the past, while mocking Geithner's stress tests for banks.
CNBC television was a host for the Columbia event.

Source: Reuters

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Buffett, Gates tell students worst is behind us (seattletimes.nwsource.com)