March 28, 2019 / 3:14 PM / a year ago

IMF's firepower insufficient to respond to major new crisis: BIS head

FILE PHOTO: Bank for International Settlements (BIS) General Manager Agustin Carstens leaves after G-20 finance ministers and central banks governors family photo during the IMF/World Bank spring meeting in Washington, U.S., April 20, 2018. REUTERS/Yuri Gripas

PARIS (Reuters) - The International Monetary Fund does not have sufficient lending capacity to respond if a major new emerging market crisis affecting several countries erupted, the head of the Bank for International Settlements said on Thursday.

BIS general manager Agustin Carstens, a former head of the Bank of Mexico, said that last reviews of IMF quotas, how much member countries pay in and the voting rights that go with that, had failed to ensure it had sufficient financial resources.

“This leaves us with the problem of having inadequate resources and having to improvise in times of crisis. The mission of the fund is there,” Carstens told a conference at the French central bank.

“If the Fund cannot do it others will have to do it otherwise the economic costs will be huge,” he added.

Reporting by Leigh Thomas; editing by Richard Lough

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