BRIC markets create 100 billion Dollars buffer.
Brazil, Russia, India, China and South Africa have pledged to create a 100 billion fund to help protect their markets from shocks as the G20 debates the impact of the withdrawal of monetary stimulus on the world economy.According to the agreement announced at a meeting of G20 leaders in Russia, China will contribute $41 billion to the fund. Brazil, India, and Russia will provide $18 billion each while new member South Africa will pay $5 billion.The fund -- dubbed the Contingent Reserve Arrangement -- is designed to provide member countries with an emergency cushion of cash during times of crisis.
Its creation reflects frustration in emerging markets at a lack of influence over institutions such as the international monetary fund despite their growing importance in the world economy.Jim O'Neill, a former Goldman Sachs economist who coined the "BRIC" acronym, called the $100 billion fund "an encouraging, interesting development" that could help emerging markets "take more responsibility" for themselves on the international economic stage."To reduce the vulnerability of these countries and others, they've got to develop their own funding sources and their own currencies in a spectacular way," O'Neill told CNN.
Its creation reflects frustration in emerging markets at a lack of influence over institutions such as the international monetary fund despite their growing importance in the world economy.Jim O'Neill, a former Goldman Sachs economist who coined the "BRIC" acronym, called the $100 billion fund "an encouraging, interesting development" that could help emerging markets "take more responsibility" for themselves on the international economic stage."To reduce the vulnerability of these countries and others, they've got to develop their own funding sources and their own currencies in a spectacular way," O'Neill told CNN.
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