IMF, EU May Need to Spend More to Avoid East Europe Crunch

The International Monetary Fund and other lenders, who spent $42 billion to stem an eastern European banking crisis from 2009, may be forced to commit more aid to the region to cushion the effects of banks cutting assets.

The IMF, the European Bank for Reconstruction and Development, the World Bank and the European Investment Bank should “stand ready to provide external assistance and financial support to banks” in eastern Europe, the Vienna Initiative group of regulators and policy makers said in a statement after a meeting in the Austrian capital yesterday. The risk of “excessive and disorderly deleveraging as well as a credit crunch” looms over the region, they said.