Countries that provide bilateral credit lines to the International Monetary Fund want the power to veto loans drawn from those precautionary arrangements, according to people familiar with the discussions.
The IMF has been in talks with more than 30 countries that made available $393 billion to the fund in 2012 through bilateral credit lines, said the people, who asked not to be identified because the negotiations are private. The Washington-based lender is looking to extend some of those facilities that are set to expire at the end of the year.
Ahead of the IMF's annual meetings next month, consensus is building to renew the credit lines, as long as the IMF's executive board approves a governance structure that will require the approval of creditor nations before the money is disbursed, said one of the people. The safeguard under discussion will allow a lending nation to block bilateral funding to a country whose policies it finds objectionable.