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BRICS Eye Joint Anti-crisis Fund
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The leaders of BRICS nations - Brazil, Russia, India, China and South Africa - pledged at the Group of 20 summit in Mexico to chip in $75 billion to boost the IMF's lending power but had sought to tie the loans to voting reforms.
At the same time BRICS finance ministers and central bank governors were instructed to study possible currency swaps arrangements and report to next year's BRICS leaders' summit in South Africa.
"It is clear that BRICS countries have entered the stage when they can demand to be reckoned with (in the course of the IMF reform)," Deputy Finance Minister Sergei Storchak told reporters.
"The issue of currency swaps, or maybe at some point a joint anti-crisis fund, should be viewed from this perspective," he said. "It will be a parallel mechanism in addition to the IMF."
The five BRICS nations represent 43 per cent of the world's population and about 18 per cent of global economic output. They have about $4 trillion in combined reserves, with the lion's share held by export powerhouse China.
"We want emerging countries to be treated fairly. The demonstration of our desire is our statement on the currency swaps mechanism," Storchak said.
Russia and its partners in an ex-Soviet customs union, Kazakhstan and Belarus, have already set up an anti-crisis fund which has lent money to crisis-hit Belarus.
Break The Link
The emerging nations are set to raise their clout in the IMF through increasing their voting power in the IMF known as quotas. Russia wants the quotas to be calculated based on the size of the GDP and forex reserves.
Storchak said that a new formula for the IMF quotas distribution should be agreed this year before Russia assumes the G20 presidency.
Storchak said the BRICS countries understood that the funds will be used to deal with the eurozone crisis and said there was no aggressive criticism of the Europeans at the G20 summit in Los Cabos, Mexico.
"The task the Europeans face is very concrete; to break the link between the situation in the banking sector and sovereign debt as quickly as possible," said Storchak.
"The sooner they break this link, the higher the chances of them returning to the path of growth."
Storchak said Europe's move towards an integrated banking system was viewed by the emerging economies as more significant than the EFSF (European Financial Stability Facility) bonds or a fiscal union.
Storchak said that Russia's indebted companies were much better positioned to weather the crisis than in 2008 when many suffered from margin calls and came close to default.
"According to the information we have the corporations which raised funds against collateral managed to solve their problems," Storchak said.
Storchak said that Russia has not been questioned at the G20 over the recent weakening of the rouble and added that the central bank's policy of a more flexible currency has been praised.
He said that Russia, the holder of the world's third largest gold and forex reserves, had not received any requests for financial help from cash-strapped EU member Cyprus, which hosts many Russia-linked offshore firms and banks.