The International Monetary Fund, one-sixth of which is seeded by the United States, is now seeking $1.3 trillion to backstop European debt:
The International Monetary Fund, looking to assure markets that it has the financial firepower to deal with deepening problems in Europe and also crises elsewhere, is exploring how it can have at least $1.3 trillion in lending power, according to officials involved with the discussions.
The IMF currently has about $630 billion in usable resources; about two-thirds of that could be lent under IMF rules.
Under the plan be considered, the fund would need to make permanent a $590 billion temporary lending facility that was put in place in response to the 2008 financial crisis.
The IMF is also counting on member nations to finally enact a doubling of IMF member country dues, totaling $750 billion, which have already been approved in principle.
The U.S. is already on the hook for its share of the $150 billion IMF bailout of Greece, as well as the $100 billion IMF loan to Ireland.
Typically, debt is considered to stunt economic growth at levels above 90% of Gross Domestic Product. Benefactors of the IMF's latest maneuver will include German and French banks exposed to $1.3 trillion in loans to Portugal (224% Debt-to-GDP), Ireland (1,382% Debt-to-GDP), Italy (147% Debt-to-GDP), Greece (182% Debt-to-GDP), and Spain (179% Debt-to-GDP).