G20 pledges more than $430 billion for IMF

The Group of 20 nations on Friday pledged more than $430 billion to better than double the International Monetary Fund's lending capacity and protect the global economy from the euro zone's debt crisis.

The commitments seek to ensure the IMF's resources are not overwhelmed should the crisis spread. Greece, Ireland and Portugal have already received bailouts, and investors are worried about Italy and Spain, whose economies are the third and fourth biggest in the euro zone.

Although the global lender would be able to use its increased firepower to help any country or region in need, Europe's crisis was the driving force behind the push for more funding.

"There are firm commitments to increase resources made available to the IMF by over $430 billion," the G20 nations of developed and emerging economies said in a communique.

Worries about the euro zone's debt crisis have dominated talks among finance officials in Washington this week for the semiannual meetings of the IMF and World Bank. The IMF has warned the crisis presents the gravest risk to the global economic expansion.

In a reminder of the financial stress, 10-year government bond yields in Spain topped 6 percent for the third time this week. Rising yields reflect investors' demand for higher returns to compensate for perceived increases in risk, and there are fears that Spain's borrowing costs will become unaffordable.

"The tail risks facing the global economy only months ago have started to recede," the G20 said after a meeting. "However, growth expectations for 2012 remain moderate, deleveraging is constraining consumption and investment growth, volatility remains high partly reflecting financial market pressures in Europe and downside risks still persist."

Emerging markets won assurances from their G20 partners that their growing economic clout would be rewarded over time with greater voting power in the IMF. Brazil, in particular, had pushed for such a pledge.

Brazilian Finance Minister Guido Mantega said after the G20 meeting that the BRICS group of leading emerging nations - which also includes Russia, India, China and South Africa - had unanimously agreed to provide more money for the IMF.

(Writing by Stella Dawson and Tim Ahmann; Additional reporting by Walter Brandimarte and Leika Kihara; Editing by Neil Stempleman and Leslie Adler)