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IMF warns of inadequate financial resources to stem a global economic crisis

IMF warns of inadequate financial resources to stem a global economic crisis

Financial Crisis

The International Monetary Fund said global economies will not be sufficiently equipped to face a new economic and financial crisis of a major scale.

This is according to a recently published report by the institution highlighting the lack of accumulated resources to precisely deal with a possible crisis.

The IMF blames the fragmentation of these resources that financial experts refer to as global financial safety nets.

The nets include financial aid that can be used during a crisis which include foreign exchange reserves for each country, bilateral swap agreements and funds from agreements such as the European Stability Mechanism.

The IMF nevertheless reveals that the total amount of financial safety nets has exploded since the Asian and the Russian crisis of the late 1990s.

Moreover, developed economies do not have access to all financial aid except for countries like the United States, members of the EU, Japan, Canada, Britain and Switzerland.

On the other hand, emerging economies like Brazil, Turkey, South Africa and even China have limited access to certain types of resources.