IMF, EU May Need to Spend More to Avoid East Europe Crunch |
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January 17, 2012
The International Monetary Fund and other lenders, who spent $42 billion to stem an eastern European banking crisis after 2009, may be forced to commit more aid to the region to cushion the effects of banks cutting assets.
The IMF, the European Bank for Reconstruction and Development, the World Bank and the European Investment Bank should “stand ready to provide external assistance and financial support to banks” in eastern Europe, the Vienna Initiative group of regulators and policy makers said in a statement after a meeting in the Austrian capital yesterday.
“In the absence of coordination, excessive and disorderly deleveraging as well as a credit crunch may be the outcome,” said the group, which also includes the European Commission, the European Central Bank and bank regulators in eastern Europe as well as in countries including Austria, Italy, Belgium, France and Germany.
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