MercoPress. South Atlantic News Agency

Japan pledges 100 billion USD to boost IMF crisis fund

Prime Minister Taro Aso

Japan will propose at the upcoming Group of 20 Washington summit the doubling of the current 340 billion dollars provided to the International Monetary Fund to help strengthen its capacity to address financial crises and is willing to pledge 100 billion US dollars of its reserves, according to government sources in Tokyo.

Prime Minister Taro Aso is also expected to support the demand for emerging economies to have a bigger say in the IMF as has been requested by BRIC (Brazil, Russia, India, China) members and other developing countries. To further strengthen the IMF, PM Taro Aso will call for raising the contribution ratio of emerging economies so that global institutions such as the IMF and World Bank will no longer be controlled by the United States and European countries. The Tokyo sources said PM Aso also will argue the need to write off nonperforming loans from financial institutions and call for integrated efforts between financial and industrial sectors, including reducing borrowers' debt. Japan Ato will say, is prepared to provide up to 100 billion dollars to the IMF from its international reserves as part of its efforts to tackle the ongoing financial crisis. Short-term measures Aso will propose for tackling the economic turmoil will include urging other participants to accurately assess the amount of nonperforming loans held by financial institutions and disclose this information so that "toxic" loans can be written off without delay. On Wednesday US Treasury Secretary Henry Paulson said the U.S. government had for the time being, dropped its original plan to purchase troubled assets. Japan is in a privileged situation because of its past experience particularly the financial crisis of the nineties, when the government injected public funds into financial institutions without fully understanding the actual state of nonperforming loans held by individual financial institutions. Consequently, the economic turmoil in the 1990s dragged the Japanese economy down until the early 2000s, economic observers say.