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Mohamed A. El-Erian

IMF Would Be Other Casualty of Greek Default

Fund could lose standing as world's lender of last resort.
Still working it out.

Still working it out.

Photographer: Ben Standall/AFP/Getty Images

All sides are working hard to prevent Greece from defaulting on its debt obligations to the International Monetary Fund -- and with good reason: Such an outcome would have dire consequences not only for Greece and Europe but also for the international monetary system. 

The IMF's "preferred creditor status" underpins its ability to lend to countries facing great difficulties (especially when all other creditors are either frozen or looking to get out). Yet that capacity to act as lender of last resort is now under unprecedented threat.