The IMF Stand-By Arrangement (SBA) is an economic program of the International Monetary Fund (IMF) involving financial aid to a member state in need of financial assistance, normally arising from a financial crisis. In return for aid, the economic program stipulates needed reforms in the recipient country aimed at bringing it back on a path of financial stability and economic sustainability. The SBA is a sub-set of IMF and World Bank programs aimed at Structural adjustment.
IMF’s Stand-By Arrangement was created in June 1952 to provide financing to countries requiring help with balance of payments problems. The SBA has often been used by member countries and is the dominant lending instrument of the IMF, especially for emerging market countries. After a significant pause in such aid, the financial crisis that erupted in 2008 resulted in a large number of countries requiring such financial assistance from the IMF. The financing terms are normally more advantageous than private markets offer. In 2009, the IMF upgraded the SBA "to be more flexible and responsive to members countries’ needs." At the same time, the borrowing limits were doubled and more funds were made available up front. Generally, the "conditions were streamlined and simplified."[1]
For a long time, structural adjustment programs have been criticised for making excessive demands of austerity in the recipient country in return for financial aid. Such criticisms have been less pronounced in recent years, notably since 2009, when the IMF's SBA policies were modified to be more responsive to the recipient countries needs. An exception is perhaps Greece, which has been bordering on a Sovereign debt crisis in 2010 and 2011. The resulting pronounced cutbacks in public spending have resulted in mass protests and riots. In this case, the criticism has been increasingly directed at the requirements of Euro membership, considering the large amount of financial aid also coming from other Euro Area countries, rather than an IMF standby arrangement.[2][3][4]
^IMF Stand-By Arrangement, IMF website, March 31, 2011.
^"EU's Damanaki tells Greece euro membership at risk," May 25, 2011, Reuters.
^"Europe gives Greece ultimatum: austerity for loans," Reuters, 20 June 2011.
^"How the Euro Became Europe's Greatest Threat," Der Spiegel, 20 June 2011.
February 20, 2024
stand, arrangement, economic, program, international, monetary, fund, involving, financial, member, state, need, financial, assistance, normally, arising, from, financial, crisis, return, economic, program, stipulates, needed, reforms, recipient, country, aime. The IMF Stand By Arrangement SBA is an economic program of the International Monetary Fund IMF involving financial aid to a member state in need of financial assistance normally arising from a financial crisis In return for aid the economic program stipulates needed reforms in the recipient country aimed at bringing it back on a path of financial stability and economic sustainability The SBA is a sub set of IMF and World Bank programs aimed at Structural adjustment Contents 1 Description 2 Recipients 3 Criticisms 4 See also 5 ReferencesDescription editIMF s Stand By Arrangement was created in June 1952 to provide financing to countries requiring help with balance of payments problems The SBA has often been used by member countries and is the dominant lending instrument of the IMF especially for emerging market countries After a significant pause in such aid the financial crisis that erupted in 2008 resulted in a large number of countries requiring such financial assistance from the IMF The financing terms are normally more advantageous than private markets offer In 2009 the IMF upgraded the SBA to be more flexible and responsive to members countries needs At the same time the borrowing limits were doubled and more funds were made available up front Generally the conditions were streamlined and simplified 1 Recipients editA number of countries have received an SBA during the Late 2000s financial crisis including Hungary Iceland and Greece Criticisms editFor a long time structural adjustment programs have been criticised for making excessive demands of austerity in the recipient country in return for financial aid Such criticisms have been less pronounced in recent years notably since 2009 when the IMF s SBA policies were modified to be more responsive to the recipient countries needs An exception is perhaps Greece which has been bordering on a Sovereign debt crisis in 2010 and 2011 The resulting pronounced cutbacks in public spending have resulted in mass protests and riots In this case the criticism has been increasingly directed at the requirements of Euro membership considering the large amount of financial aid also coming from other Euro Area countries rather than an IMF standby arrangement 2 3 4 See also editEuropean sovereign debt crisisReferences edit IMF Stand By Arrangement IMF website March 31 2011 EU s Damanaki tells Greece euro membership at risk May 25 2011 Reuters Europe gives Greece ultimatum austerity for loans Reuters 20 June 2011 How the Euro Became Europe s Greatest Threat Der Spiegel 20 June 2011 Retrieved from https en wikipedia org w index php title IMF Stand By Arrangement amp oldid 1032076711, wikipedia, wiki, book, books, library,
