According to BusinessInsider reports the IMF will offer a new credit line program to allow sovereigns to "break the chain of contagion." A new "Precautionary Credit Line" would allow governments with sound financials who have made prior agreements with the IMF to access liquidity of 1000% of a member's quota for 1-2 years. It would also allow them to access up to 500% of their quota in liquidity on a 6-month basis.
The funds would be offered to sovereigns suffering from "exogenous shocks."
Markets and the euro spiked immediately on the news. There are, however, a few big problems with this new proposal….
Find out what they are at http://www.businessinsider.com/cnbc-imf-will-offer-huge-liquidity-program-to-stem-contagion-2011-11
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