BROWSE

General Agreements To Borrow (GAB)

What is 'General Agreements To Borrow - GAB'

A borrowing/lending medium for members of the Group of Ten. Members of the lending country deposit funds into the International Monetary Fund (IMF), which are made available to be withdrawn by the borrowing member in need. One of the advantages of this is that each country deals in their own currency, leaving all conversions to the IMF.

Explaining 'General Agreements To Borrow - GAB'

The Group of Ten is comprised of Japan, France, Germany, Sweden, The United Kingdom, Japan, Italy, Belgium, the Netherlands, the United States and Canada. Switzerland is the most recent member. They meet yearly to discuss political, financial and economic situations.


Further Reading


Global governance after the financial crisis: A new multilateralism or the last gasp of the great powers?
onlinelibrary.wiley.com [PDF]
… tiations with other high-income countries to augment the General Arrangements to Borrow … some sovereign borrowers include qualified-majority voting clauses in their loan agreements, creditors may … Imagine that Fund staff and management reach an agreement with the debtor's …

Instruments and techniques for financial cooperationInstruments and techniques for financial cooperation
books.google.com [PDF]
… tiations with other high-income countries to augment the General Arrangements to Borrow … some sovereign borrowers include qualified-majority voting clauses in their loan agreements, creditors may … Imagine that Fund staff and management reach an agreement with the debtor's …

Borrowing of the International Monetary Fund during the global financial and economic crisisBorrowing of the International Monetary Fund during the global financial and economic crisis
scindeks.ceon.rs [PDF]
… tiations with other high-income countries to augment the General Arrangements to Borrow … some sovereign borrowers include qualified-majority voting clauses in their loan agreements, creditors may … Imagine that Fund staff and management reach an agreement with the debtor's …



Q&A About General Agreements To Borrow (GAB)


Who are the members of the Group of Ten?

Japan, France, Germany, Sweden, The United Kingdom, Japan, Italy, Belgium, the Netherlands and Canada.

Where does this group meet yearly to discuss political financial and economic situations?

They meet in Washington D.C. every year to discuss political financial and economic situations.

What is the GAB?

The GAB is a borrowinglending medium for members of the Group of Ten.

What are some advantages of using this method?

One advantage is that each country deals in their own currency leaving all conversions to be done by IMF. Also no need for foreign exchange risk or interest rate risk as it is an interest free loan from one country to another with no repayment date specified so there is no time value of money issue involved. Another advantage would be that there would be less pressure on individual countries' reserves as they could borrow from other countries if needed without having to sell off assets or raise taxes which could cause domestic issues within a country such as inflation or unemployment due to higher taxation rates needed for repayment purposes. There would also be more liquidity available in global markets since each member has access to borrowing funds from other members at any time should they need them instead of having only their own reserves available at any given time which may not always be enough depending on how much they have saved up over time versus how much they may need at any given point in time depending on what type of situation arises where extra funds are required outside those already held by a particular member state's central bank . This system also allows for better coordination between different countries when dealing with international monetary policy issues since all members have equal say regarding these matters rather than just one or two large players who might otherwise dominate proceedings if it was just them making decisions regarding monetary policy changes etc.. It also helps avoid competitive devaluation

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