The International Monetary Fund has indicated that they are considering taking part in a special investment vehicle being proposed by the European Financial Stability Facility, though no decision has yet been made.
On Wednesday, euro-zone leaders are expected to approve a plan to expand the powers of the 440 billion-euro EFSF without euro-zone countries having to contribute more money to the bailout fund. The plan would allow the EFSF to create a special purpose investment vehicle, or SPIV, which would issue debt and use the proceeds to buy the bonds of distressed nations on the secondary market, or to extend them loans.
Early proposals show that the SPIV could be funded by private investors, sovereign wealth funds, or even the IMF. “They have not agreed yet, but they have not ruled out this possibility. We have to define it better — there would have to be a political agreement that this is something we would like to do and then we could talk with the IMF and the others,” according to one euro-zone official.
Another euro-zone official has said that the IMF might set up an administrative account for the EFSF, thus bypassing the SPIV and providing the fund with more flexibility, a move thought to be both simpler and more expeditious. IMF shareholders and possibly even sovereign wealth funds could then put money into the account.