MOST RISKY???
You need to rethink that. If you do a little research, you'll note that no country has lost money lending to the IMF in its 67-year history. That's hardly the credit risk profile of a "MOST RISKY institution".
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What is KJ's problem?
- Thread starter steffychun
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MOST RISKY???
You need to rethink that. If you do a little research, you'll note that no country has lost money lending to the IMF in its 67-year history. That's hardly the credit risk profile of a "MOST RISKY institution".
Not losing money doesn't mean not risky. Risk depends on the kinds of lending it involved itself. If I am not wrong and remember correctly, there were loans written off by countries thus IMF in "good will" and that is not considered as "lost money".
Goh Meng Seng
Goh Meng Seng
Agree that not losing money doesn't equal no risk. But surely an institution that has never NOT repaid it's lenders in it's 67 year history, doesn't deserve the label MOST RISKY.
The IMF has always repaid it's member countries that commit funds. However, the IMF doesn't always get re-paid when it acts as a lender to distressed countries. That's why IMF defaults refer to countries that either fail to repay IMF loans or get the IMF's approval to write off the debt. Do note that even though the IMF doesn't get re-paid sometimes, this has not affected the Fund's ability to repay it's own commitments. That's why I don't consider the IMF a risky institution to lend to, despite the fact that they do engage in risky lending themselves.
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Sometime, write off of loans to those countries will need the concurrent commitment by some other countries to write off their loans to these institutions. IMF does have a reserve of Gold but I doubt that it could keep writing off loans without getting some of its creditors to write off their loans to it as well.
Goh Meng Seng
Goh Meng Seng
Take this instance for example:
[url]http://www.un.org/en/africarenewal/vol19no3/193cancel-debt.html
[/URL]
"Rich nations of the Group of Eight (G-8) have formally acceded to a long-standing demand of poor countries by offering to write off $40 bn in debt to multilateral institutions. The decision, taken at the G-8 Summit in July, covers the debt that 18 countries — 14 of them African — owe to the World Bank, the International Monetary Fund (IMF) and regional development banks such as the African Development Bank. Anti-debt campaigners, however, have criticized the move as too little relief, too late and worry that it will be riddled with many new conditions."
[url]http://www.un.org/en/africarenewal/vol19no3/193cancel-debt.html
[/URL]
"Rich nations of the Group of Eight (G-8) have formally acceded to a long-standing demand of poor countries by offering to write off $40 bn in debt to multilateral institutions. The decision, taken at the G-8 Summit in July, covers the debt that 18 countries — 14 of them African — owe to the World Bank, the International Monetary Fund (IMF) and regional development banks such as the African Development Bank. Anti-debt campaigners, however, have criticized the move as too little relief, too late and worry that it will be riddled with many new conditions."
KJ should address MAS's answer first. MAS is saying that depositing money with IMF is like depositing money in a bank - withdrawable on demand. It is like saying that I commit to depositing $1 in UOB Bank. Theoretically it's a "loan" to UOB Bank, yet at the same time it is considered my money.
No clear example. You fail GP.
This is not the issue dummy
The real issue is whether the PAP can make such comitments without so much as a vote in Parliament. While they can easily railroad this with their overwhelming majority, this should be captured in the offical voting record.
Beyond this, there is the question of whether Singaporeans approve of their money being used this way. There are a multitude of infrastructure projects which the PAP should be undertaking. If we didn't lend out US$4 billion, we could almost immidiately solve the MRT overcrowding, buy additional buses and even build an extra hospital or two. Why are we lending the money away instead of using it to give Singaporeans a better life NOW?
Beyond this, there is the question of whether Singaporeans approve of their money being used this way. There are a multitude of infrastructure projects which the PAP should be undertaking. If we didn't lend out US$4 billion, we could almost immidiately solve the MRT overcrowding, buy additional buses and even build an extra hospital or two. Why are we lending the money away instead of using it to give Singaporeans a better life NOW?
The fact is that the IMF doesn't routinely write off loans. It gets repaid more often than be forced to incur losses. A careful anaylsis of the Fund's accounts will be revealing. Therefore, the Fund has never required any of creditor nation to incur a loss. I would add that IMF pledges (of the kind that S'pore entered into) have very strict covenants that forbid the IMF from even suggesting that the creditor nation voluntarily forgive the loan.
The example that you (GMS) provide, contains no evidence of any IMF member nation having to write off any funds loaned to the IMF. The G8 was consulted simply because they represent the main stakeholders in the IMF and World Bank etc. No IMF member nation suffered a loss on any IMF related loan as a result of this write off, nor were any of them asked to voluntarily suffer a loss.
There is nothing special about Singapore's pledge to the IMF. It's a mechanism undertaken by many other member nations and often dealing with much higher amounts. The money is pledged (as a confidence mechanism) and will not necessarily be drawn upon at all (or only in part). It is a financial asset and will form part of the Official Foreign Reserves (OFR) managed by the MAS. That also means that it will be paid out of the OFR (if needed) and not from the Past Reserves (protected by the Constitution). It's also repayable on demand if the MAS suffers any liquidity problems.
What's special about this pledge is that Singapore is able make it without any Parliamentary Scrutiny! Let's focus on that!
The amount is pledged to given as yet. Singapore is not the only country providing. Debt ridden countries are also giving and did not consult their monarchs, presidents or parliaments.
KJ cna take is Cambridge cert and wipe his arse.
KJ cna take is Cambridge cert and wipe his arse.
Yes, Singaporeans should have a say (thru Parliament, like the British people do)
No, the money isn't being loaned out in the usual way. It's a pledge which may or may not be called upon. If activated, the funds will come from the OFR managed by the MAS. You don't get to use funds from the OFR to finance MRT trains etc. So even without the pledge, you still don't get all that $$ to spend on making Singaporeans better off.
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You probably don't have a Camb cert or you might know that in most of these cases, some form of parliamentary scrutiny (or something similar) was indeed required.
No they were not.
No just debate was made in the UK parliament for example. George Osborne still pledged more than Singapore's 4 billion.
IMF has started to write off loans routinely since 2005, starting from the African countries to Pakistan. The British has advocated IMF to sell off some of its Gold reserves to finance such write off but IMF didn't use that. Apparently, G8 has been consulted not only because they are the main stake holders but rather, some requirements of them to exercise write off of loans to IMF were needed to execute that. That is why England suggested selling off the Gold reserves to finance that instead but failed.
If you observed, even Japan has written off debts to Burma under the blanket of IMF initiated loans. IMF may not come up with its own funds directly when they issue loans to countries but instead, make a concerted efforts to arrange loans contributed by various countries and their banks.
Goh Meng Seng
If you observed, even Japan has written off debts to Burma under the blanket of IMF initiated loans. IMF may not come up with its own funds directly when they issue loans to countries but instead, make a concerted efforts to arrange loans contributed by various countries and their banks.
Goh Meng Seng
As a politician it is his job to question the government be it right or wrong. Being a busybody helps to keep the people in-charged on their toes, if he rock the correct issues, it can help him score political points. People may see him as an idiot, but it is better than doing nothing, not trying at all.
KJ request the government to setup a COI to investigate on this loan. It is an IN thing.
KJ request the government to setup a COI to investigate on this loan. It is an IN thing.
If you're going to be make noise here, please get your facts right!
The UK govt sought and got approval from Parliament for IMF commitments up to a combined ceiling of 40 billion pounds. 30 billion was already pledged up to the point when Mr Osborne made that 10 billion commitment you refer to. 10+30 = 40, therefore, he didn't need UK Parliamentary approval for that last 10. If the UK wants to pledge anymore money to the IMF, Mr Osborne has to go hat in hand to Parliament for the Okay (which he won't get from the rather angry response to the most recent 10 billion). Is it clear to you now?
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