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Head of IMF calls for extra £68billion to bail out struggling countries
The head of the International Monetary Fund has asked for an extra
£68billion ($100billion) of funding to help it play a greater role in
assisting a global economic recovery.

By Graham Tibbetts
Last Updated: 8:49AM GMT 17 Nov 2008

Dominique Strauss-Kahn said the money was needed over the next six
months to provide a safety net for struggling countries.

His comments came as the Japanese economy officially entered a
recession, shrinking 0.1 per cent in the third quarter.

This follows a 0.9 per cent contraction in the world's second-biggest
economy in the previous quarter from April to June.

On Saturday, leaders at a Washington summit of the G20 group of the
world's largest economies agreed to co-operate closely to stimulate
worldwide economic growth, with both developed and developing countries
working to cut taxes and interest rates, and increase government
spending.

Finance ministers were also asked to discuss the longer-term reform of
financial regulation, including executive pay and risky lending.

Their proposals will be discussed at a follow-up summit in April.

The weekend's G20 meeting brought together leading industrial powers,
such as the US, Japan and Germany, and emerging market countries like
China, India, Argentina, Brazil and others - representing 85 per cent of
the world's economy and two thirds of its population.

The communique issued after the summit stressed the International
Monetary Fund's "important role in crisis response", welcomed its new
short-term liquidity facility, and urged the ongoing review of its
instruments and facilities to ensure flexibility.

The organisation reportedly has substantial resources to lend to
countries in need of financial assistance.

Before the summit the figure was £170billion ($250billion) , although
Japan increased this by pledging a further £68billion ($100billion) .

But the IMF's managing director said that although it did have money
enough for the immediate future, it was likely to need more.

"The number of countries having problems at the same time has
dramatically increased and they come to the IMF asking for support," Mr
Strauss-Kahn told the BBC.

"So we need more resources."

He described the Japanese prime minister's offer on Friday as a "huge
step forward", saying it meant the IMF now had "enough resources to
address the problem we are facing today".

The former French finance minister said the organisation would probably
need around £68billion in additional funding in order to cope with
increased demand.

Mr Strauss-Kahn also called on countries to tackle the economic crisis
themselves by cutting interest rates and using government finances.

http://www.telegrap h.co.uk/finance/ financetopics/ recession/ 3470905/Head-
of-IMF-calls- for-extra- 68billion- to-bail-out- struggling- countries. html
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