19.04.2012
By Simon Miller
The International Monetary Fund (IMF) has welcomed additional pledges of funding from Switzerland and Poland which brings the commitments to around $320bn (£200bn).
Switzerland has pledged $26bn while Poland has promised an extra $8bn and they join the likes of Japan which promised $60bn earlier this week in response to a plea from the IMF that it needed at least $400bn to offset any contagion that could arise from the eurozone.
In a statement, IMF managing director Christine Lagarde welcomed the additional pledges saying it demonstrated the "willingness to support the cooperative effort under way to strengthen global economic and financial stability".
She added: "These members’ contributions bring total additional commitments of increased resources for the IMF today to $34 billion. I salute their enduring support for the spirit of multilateralism. Ensuring that the Fund has sufficient resources to tackle crises and to promote global economic stability is in the interests of all our members."
The additional pledges came as the IMF warned that European banks were still under severe pressure from weak growht and high debt repayments.
In its Global Financial Stability Report, the IMF warned that despite current policies preventing a credit crunch, "financial stress intensifies a large scale and synchronized deleveraging by European banks could do a serious damage to asset prices, credit supply and economic activity in Europe and beyond".
José Viñals, financial counsellor and head of the IMF”s Monetary and Capital Markets Department said that although some leveraging was healthy, like Goldilocks, the amount, pace, and location of deleveraging must be just right – not too large, too fast or too concentrated in one region or country”.
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The (approximate) additional financial pledges so far:
• Denmark’s Nationalbank $7bn
• Euro Area $200bn;
• Japan $60bn;
• Norway $9.3bn;
• Sweden $10bn;
• Switzerland $26bn
• Poland $8bn
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