IMF requests hundreds of billions for bail-out loans

The International Monetary Fund (IMF) has requested an extra $500 billion (£324 billion) from its member countries in order to plug global demand for bail-out loans during the next two years.

According to the Financial Times, it currently has $387 billion (£251 billion) available to it in resources, however, it is thought that demand for bail outs will reach close to $1 trillion (£648 million).

Christine Lagarde, managing director of the IMF, was quoted as saying: "I welcome the recognition of the importance of ensuring adequate fund firepower to help defuse the current global economic weaknesses and regional challenges."

She hopes that the fund will be increased, subject to adequate safeguards.

While the IMF has not broken down its projections by region, it is expected by most that the eurozone will account for a large section of this extra bail-out money.

The news provider states that $1 trillion would be enough to fund a "reasonably-sized" lending programme for Spain and Italy, whose governments might otherwise struggle to remain solvent.

These countries were among the nine to have their sovereign debt ratings cut by Standard & Poor's at the end of last week, with France also losing its AAA status.

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