The expansion of the NAB was approved by the IMF on April 12, 2010 and became effective following completion of the ratification process by NAB participants. The reforms increase the NAB from SDR 34 billion (about US$[53] billion]) to SDR 367.5 billion (about US$[576] billion) once all new participants have adhered to the expanded NAB, giving a major boost to the resources available for the International Monetary Fund (IMF) to lend to its members.

The NAB reform process began in response to the call by the leaders of the Group of 20 (G-20) economies at its April 2009 London summit, endorsed by the International Monetary and Financial Committee (IMFC), to increase the financing available to the Fund, through an expanded and more flexible NAB increased by up to US$500 billion. Thirteen new participants, including a number of major emerging market economies, have joined 26 participants in the previous NAB or are in the process of completing their domestic processes for adherence.

Background

The NAB is the IMF’s principal standing set of credit lines under which 39 members or their institutions are committed to provide supplementary resources to the IMF when these are needed to forestall or cope with a threat to the international monetary system. The NAB is supplementary to quota resources, which are made up of the quota subscriptions each country pays upon joining the Fund, broadly based on its relative size in the world economy. Under the 2008 quota and voice reform that became effective on March 3, 2011 , approved quotas of IMF members total SDR 238.3 billion (about US$[374] billion) and will rise to approximately SDR 476.8 billion (about US$747 billion) once the quota increase under the 14th General Review of Quotas agreed in late 2010 comes into effect—which is planned to be achieved by the Annual Meetings in late 2012. When the quota increase comes into effect, it is agreed that the NAB will be correspondingly scaled back, with details to be determined during the review of the NAB to be completed by mid-November 2011.

The recent unprecedented shock confronting the global economy led to a sharp increase in the demand for IMF financing. To ensure that the IMF continues to have sufficient resources to meet demand, leaders of the G-20 agreed in April 2009 that immediate financing from members of US$250 billion under bilateral borrowing agreements would subsequently be folded into an expanded and more flexible NAB, increased by up to $500 billion. This call was endorsed by the IMFC. Pending the effectiveness of the expanded NAB, member countries have pledged more than $300 billion in immediate bilateral financing.