Larger pledge
I am now being told that the pledge for trade finance will be larger than thought - $250bn, though as I suggested yesterday, a good chunk will be national efforts that have already been announced.
As my colleague Robert Peston says, the $250bn SDR (Special Drawing Rights) allocation is huge news, and note the significance of the number: that's the maximum increase they could do without the US having to seek approval from Congress.
Congress is relevant to the IMF money as well - the US will have to get congressional approval for its promise to lend more to the Fund, which I am told will be $100bn. But crucially, by long convention the cost will be scored at zero. Which is why the leaders are willing to take Obama's promise on faith.
For more background on the SDR issue, see my article .
Update 13:14: To clarify the point about the IMF lending and the US Congress: it's all very nerdy stuff, but the US wants to put its money in the IMF by contributing to a multilateral lending facility called the New Arrangements to Borrow.
The Congressional budget office, which determines the cost to the budget of everything the government does, has traditionally scored these contributions at zero cost because the US would effectively be making money available to a triple-A rated institution, the IMF, and getting a claim on all the IMF members in return. Boring, but crucial.
I'm 
Comment number 1.
At 2nd Apr 2009, 29finistere wrote:Thanks for the explanation regarding the congressional costing...
Compelling, though, that the IMF is characterised as triple A rated. I imagine its balance sheet is going to be very highly stressed in the short term... Will it end up any better than RBS?
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Comment number 2.
At 2nd Apr 2009, busby2 wrote:If the G20 succeeds in expanding credit as they propose, they will only succeed in generating an even bigger credit bubble and an even bigger credit crunch a few years down the line.
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Comment number 3.
At 2nd Apr 2009, JadedJean wrote:SPIN AND HUMANISM
Just for the benefit of those who 'don't believe in IQ tests' - drink this in. In our schools, Learning Difficulties (statemented SEN) are defined by low IQ scores. Now take on board that the mean IQ of sub-Saharna Africa is ~70 and that of university students about 85. That defines the average Sub-Sahraran African as having a statementable Learning Difficulty by European standards. Think about how easy prey they are to 'entrepreneurs'. Now, think of the sub-prime target in the USA - that is the Average IQ of Black Americans. It's not much different in countries with large, fast growing populations like Pakistan and Bangladesh.
So, when you hear of Third Workd, Developing Emerging Markets and how they need 'help' bear it in mind that they are like children, i.e impulsive and have low literacy/numeracy levels, and most of all, it's genetic. Then think how predatory the 'help' is.
Protectionism = nationalism. If you give up nationalism you give up electoral control of your country (i.e those who nominally run it) to internationalists (think of the EU as a stepping stone where our laws now have to be compliant with those of the EU). How many of the leaders attending the G20 are affiliates of the Socialist International? Is this a good thing for the UK (sorry... England..the UK has already been Balkanised)?
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