Income model reform

If the IMF believes that its resources might fall short of members' needs—for example, in the event of a major financial crisis—it can supplement its own resources by borrowing. It has had a range of bilateral borrowing arrangements in the 1970s and 1980s. Currently it has two standing multilateral borrowing arrangements and one bilateral borrowing agreement.
Through the New Arrangements to Borrow (NAB) and the General Arrangements to Borrow (GAB), a number of member countries and institutions stand ready to lend additional funds to the IMF. The maximum amount of resources available to the IMF under the NAB and GAB is SDR 34 billion. Under a separate bilateral agreement with Japan, the IMF can borrow up to US$100 billion (about SDR 68
The business model that the IMF has followed since it was established relies primarily on income from its lending operations to finance its work. Lending generates income because the IMF charges member countries that draw on its financial resources a higher interest rate than it pays to its member country creditors (this lending margin will be one percentage point during 2008-09). However, this model had become unsustainable in recent years because of a sharp drop-off in lending activity.
A Committee of Eminent Persons, set up in January 2007 and chaired by Andrew Crockett (former general manager of the Bank of International Settlements), recommended that the IMF adopt a package of income-generating measures, including strictly limited sales of gold (amounting to about one-eighth of the Fund's total gold holdings), to establish an endowment.
In May 2008, the IMF's Board of Governors endorsed a new package of measures to end the IMF's over-reliance on lending income. The package included most of the measures that had been proposed by the Crockett Committee.