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TOKYO (Reuters) - Japan is ready to offer up to $100 billion to the International Monetary Fund to assist emerging economies, a Japanese government source said on Thursday, ahead of a global summit on the financial crisis this week.
Prime Minister Taro Aso will make the proposal when leaders of the Group of 20 industrialized and emerging nations meet in Washington on Friday and Saturday, the source said.
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"Aso will say we are ready to lend up to $100 billion from our foreign reserves to the IMF if it finds itself with insufficient funds to help emergency economies," the source told Reuters.
A Japanese foreign ministry official stopped short of confirming details but said Japan was keen to see well-off countries, such as oil-rich Middle Eastern nations, join efforts to help economies facing problems due to the financial crisis.
"Japan is very keen to engage non-G8 countries in this endeavor," the foreign ministry official told reporters.
"The prime minister will encourage other countries with some comfortable level of reserves to contribute to the IMF or other international financial institutions or support directly those countries who have some difficulties."
Under Aso's draft proposal, Japan would lend funds from its $980 billion in foreign currency reserves to the IMF for loans to emerging economies.
Selling U.S. government bonds held by Japan to provide cash to the IMF would affect U.S. bond yields so Tokyo may consider lending U.S. government bonds to the IMF as collateral for it to raise funds, the Nikkei business daily said.
Prime Minister Taro Aso will make the proposal when leaders of the Group of 20 industrialized and emerging nations meet in Washington on Friday and Saturday, the source said.
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"Aso will say we are ready to lend up to $100 billion from our foreign reserves to the IMF if it finds itself with insufficient funds to help emergency economies," the source told Reuters.
A Japanese foreign ministry official stopped short of confirming details but said Japan was keen to see well-off countries, such as oil-rich Middle Eastern nations, join efforts to help economies facing problems due to the financial crisis.
"Japan is very keen to engage non-G8 countries in this endeavor," the foreign ministry official told reporters.
"The prime minister will encourage other countries with some comfortable level of reserves to contribute to the IMF or other international financial institutions or support directly those countries who have some difficulties."
Under Aso's draft proposal, Japan would lend funds from its $980 billion in foreign currency reserves to the IMF for loans to emerging economies.
Selling U.S. government bonds held by Japan to provide cash to the IMF would affect U.S. bond yields so Tokyo may consider lending U.S. government bonds to the IMF as collateral for it to raise funds, the Nikkei business daily said.
From another story:
WASHINGTON (Reuters) - Japan proposed a raft of steps on Thursday to help overcome the global financial crisis and avoid a future meltdown, including an offer to boost the IMF's firepower and a call for tougher supervision of credit rating agencies.
In a position paper released ahead of a leaders' summit of the Group of 20 leading industrial and emerging nations in Washington, Prime Minister Taro Aso said Tokyo would continue to support the dollar-based currency system despite what he said were market concerns about its outlook as U.S. economic power declines.
Japan, which holds the world's second largest foreign reserves at $980 billion, would be ready to lend up to $100 billion to the International Monetary Fund (IMF) to assist emerging economies if the Washington-based lender finds itself with insufficient funds, Aso said.
Japan, frustrated with how the IMF has handled the current crisis as well as the 1997/98 Asian financial crisis, has been calling for improvements in the institution's ability to monitor financial markets and detect signs of a crisis at an early stage.
But aware that such criticism alone is not sufficient to address the problem, Japan will also propose doubling the IMF's quota, or financial resources, to $640 billion from the current $320 billion, a government source told Reuters.
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The G20 summit in Washington on Friday and Saturday will discuss a possible overhaul of the 60-year-old Bretton Woods financial architecture, which created the World Bank to help rebuild Europe after World War II and the IMF to oversee a global economic system based on fixed exchange rates.
Before heading to the U.S. capital, Aso told a parliamentary committee on Thursday in Tokyo that creating a new financial architecture is not an overnight job. "The Bretton Woods system was not established right away and another system like that cannot be easily established," he said.
In a position paper released ahead of a leaders' summit of the Group of 20 leading industrial and emerging nations in Washington, Prime Minister Taro Aso said Tokyo would continue to support the dollar-based currency system despite what he said were market concerns about its outlook as U.S. economic power declines.
Japan, which holds the world's second largest foreign reserves at $980 billion, would be ready to lend up to $100 billion to the International Monetary Fund (IMF) to assist emerging economies if the Washington-based lender finds itself with insufficient funds, Aso said.
Japan, frustrated with how the IMF has handled the current crisis as well as the 1997/98 Asian financial crisis, has been calling for improvements in the institution's ability to monitor financial markets and detect signs of a crisis at an early stage.
But aware that such criticism alone is not sufficient to address the problem, Japan will also propose doubling the IMF's quota, or financial resources, to $640 billion from the current $320 billion, a government source told Reuters.
...
The G20 summit in Washington on Friday and Saturday will discuss a possible overhaul of the 60-year-old Bretton Woods financial architecture, which created the World Bank to help rebuild Europe after World War II and the IMF to oversee a global economic system based on fixed exchange rates.
Before heading to the U.S. capital, Aso told a parliamentary committee on Thursday in Tokyo that creating a new financial architecture is not an overnight job. "The Bretton Woods system was not established right away and another system like that cannot be easily established," he said.
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