Christine Lagarde: IMF may need billions in extra funding

Christine Lagarde has signalled that the International Monetary Fund (IMF) may have to tap its members – including Britain – for billions of pounds of extra funding to stem the European debt crisis. Photo The head of the IMF has warned that its $ 384bn (£ 248bn) war chest designed as an emergency bail-out fund is inadequate to deliver the scale of the support required by troubled states. In a document distributed to the IMF steering committee at the weekend, Ms Lagarde said: "The fund 's credibility, and hence effectiveness, rests on its perceived capacity to cope with worst-casescenarios. Our lending capacity of almost $ 400bn looks comfortable today, but pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders. "The suggestion came after European officials revealed they were working on a radical plan to boost their own bail-out fund , the European Financial Stability Facility (EFSF), from € 440bn (£ 384bn) to around € 3 trillion. (Excerpt) Read more at telegraph.co.uk …