Group of Ten (economic)
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The Group of Ten or G-10 refers to the group of countries that have agreed to participate in the General Arrangements to Borrow (GAB). The GAB was established in 1962, when the governments of eight International Monetary Fund (IMF) members—Belgium, Canada, France, Italy, Japan, the Netherlands, the United Kingdom, and the United States—and the central banks of two others, Germany and Sweden, agreed to make resources available to the IMF for drawings by participants, and, under certain circumstances, for drawings by nonparticipants. The GAB was strengthened in 1964 by the association of the eleventh member, Switzerland, then a nonmember of the Fund, but the name of the G10 remained the same. The following international organizations are official observers of the activities of the G10: the Bank for International Settlements (BIS), European Commission, International Monetary Fund, and Organisation for Economic Co-operation and Development.
The Group of Ten signed the Smithsonian Agreement in December 1971, replacing the world's fixed exchange rate regime with a floating exchange rate regime.
Luxembourg is an associate member.
The GAB enables the IMF to borrow specified amounts of currencies from these 11 industrial countries (or their central banks), under certain circumstances. Specifically, a proposal for calls under the GAB may only be made when a proposal for the establishment of an activation period under the New Arrangements to Borrow (NAB) is not accepted by NAB participants, who number 38 countries, amongst which are the BRICS nations and Middle Eastern powers. The potential amount of credit available to the IMF under the GAB totals SDR 17bn (about $26bn), with an additional SDR 1.5bn available under an associated arrangement with Saudi Arabia. The GAB was established in 1962 and expanded in 1983 to SDR 17bn, from about SDR 6bn. It has been activated ten times, the last time in 1998. The GAB and the associated credit arrangement with Saudi Arabia have been renewed, without modifications, for a period of five years from December 26, 2013.[1]
The BIS host a publications e-library page for the G10.[2]
See also
- Oxford Dictionary of Finance and Banking, ISBN 0-19-860749-0
- G10 currencies
