Federal Council adopts dispatch on reform of IMF's New Arrangements to Borrow
Bern, 12.02.2020 - During its meeting on 12 February 2020, the Federal Council adopted the dispatch on the reform of the New Arrangements to Borrow (NAB) of the International Monetary Fund (IMF) and submitted it to Parliament for approval. The NAB form the IMF's financial safety net for crises that could endanger the international monetary and financial system.
The IMF members decided to reform the NAB during the Annual Meetings in 2019. The core element is the doubling of NAB resources from the current CHF 250 billion to CHF 500 billion. This measure is intended to offset the bilateral credit lines granted to the IMF during the financial crisis; these expire at the end of 2020 and are to be only partially renewed. This reform will ensure that the IMF can draw on sufficient funds also in future systemic crises.
With the entry into force of the reform, the Swiss National Bank's maximum commitment to the NAB will increase to around CHF 15 billion. Loans granted by the SNB under the NAB are available immediately and solely to the IMF, are subject to the payment of market-rate interest by the IMF, and are not guaranteed by the Confederation.
Under the NAB, the 40 contracting countries or their central banks stand ready to lend additional funds to the IMF in order to finance support measures if the IMF's ordinary resources are insufficient. Through its involvement in the NAB, Switzerland is underlining its importance as a systemically important and credible partner for the Bretton Woods institutions, and reaffirming its role in the international financial and monetary system.
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Anne Césard, Co-Head of Communications
State Secretariat for International Finance SIF
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