A second tranche of 250 billion will come later

Dominique Strauss-Kahn has not hidden its satisfaction after the Summit of the G20 in London. "In almost all the paragraphs of the final communiqué, there is mention of the international monetary fund." "The IMF is back to business", welcomed the Director-General. It is true that the heads of State and Government of 20 major economies of the world have considerably strengthened the means and the missions of the multilateral institution that he has run since the fall of 2007.

In terms of resources, first of all. On paper, they are brought to more that triple, to $ 250 billion to more than 1,000 billion. For the time being, the Fund's lending capacity will be on a bilateral basis. A first tranche of $ 250 billion should be quickly available loans of several countries. The Japan embarked on a $ 100 billion, the European Union on an equivalent amount (75 billion euros), the Norway (up to $ 4.5 billion) and Canada ($10 billion). Beijing could agree to a loan issued by the funds and denominated in special drawing rights (SDR: unit of account of the IMF made a basket $, euros, pounds sterling, and yen).

A second tranche of $ 250 billion will come later. It passes through new borrowings (NTS) of the IMF agreements. Established in 1998, in Asian crisis, the NTS allow him to obtain credit from 26 countries. Among them are the g-7 countries but also Saudi Arabia, the Spain or the Netherlands.

And the g-20 leaders went even further. They pledged to support a special allocation of SDRS in the amount of $ 250 billion. Each of the 185 members has a share of the capital of the Fund. This amount, akin to a reserve currency for each of the Member countries, to calculate its ability to auto loan from the IMF. If a country has no usefulness, it may assign it to another. The decision of the leaders of the g-20, which is still subject to approval of the 185 members, is, somehow, to create money and inject liquidity into the international financial system.

Last stage of the rocket, the IMF will be able to assign part of its stock of gold (approximately 3.200 tons) valued at approximately 9.2 billion.

The IMF should be ready to rescue the country destabilized in macroeconomic terms. In addition to this aspect of aid, the Fund sees its extended mission. It has been indeed assigned a central role in the supervision of the monetary and financial system international. Whether it's in collaboration with the financial stability Board, created in London at the G20, or with the OECD. It will be the role of monitoring sensor of crisis also upstream as possible. On this plan, though too late, the United States and China have agreed that the multilateral institution would lead a mission of evaluation of the strength of their financial sector. What was unthinkable before the crisis has now become reality.

On the other hand, the influence of emerging countries in IMF policy will be strengthened by the reform of the quota. The process has already begun in April 2008 where 4 countries (Mexico, China, Korea and Turkey) have been slightly increased power. Initially, another operation of this type should take place in 2013. The g-20 leaders sought to accelerate the manoeuvre and to proceed to a further adjustment to the increase of the weight of the large emerging countries by January 2011. A major challenge both the IMF policy was criticised in recent years in the management of the various crises which emerging countries has been resented by his "diktat".

It remains that reform which will assign more authority to the emerging countries will not be in question the supremacy of the United States. "Whatever the mode of calculation of the quota, we end up with an increase in the power of Americans given their economic weight." Washington has however made a concession by agreeing to not see the part of the United States increase. "But Americans have always their veto power as, according to the rules of the IMF, decisions must be approved with 85 of the vote" demonstrates a senior official of the institution. One glimmer of hope: twenty great leaders of the world, including the United States, are committed to better take into account the role growing emerging countries.

For its part, the IMF did not wait the G20 Summit to operate its molt and develop his philosophy. The "Washington consensus" that that a single policy macroeconomic is valid for all the countries in crisis, also lived. Room for flexibility and case by case. Economic crisis forces last March, the Board of Trustees of the Fund has also reformed the panoply of its lending instruments. For a single purpose: simplify and relax the terms of its loans to its weight in the eradication of a global crisis. The intentions are and commitments. Rest to respect them.