The U.S. has contributed to the "broader effort" to address Europe's debt problems, Treasury Secretary Tim Geithner recently said.
WASHINGTON (CNNMoney) -- The global financial system is still on shaky ground and the multinational institution that's tasked with propping it up needs more money. But don't expect the United States to pitch in.
"We need more resources," International Monetary Fund managing director Christine Lagarde said in a recent speech.
The IMF, which acts as the United Nations of global finance, is seeking to raise $500 billion to meet an estimated $1 trillion worth of funding needs over the next few years.
The funding issue looms large as finance officials and central bankers from around the world gather this week for the spring meetings of the IMF and World Bank in Washington, D.C. The meeting takes place as the global economy faces renewed risks from the debt crisis in Europe.
Lagarde has repeatedly warned that the global economy remains fragile, despite an improving growth outlook. She has called for policymakers to renew the sense of shared purpose that prevailed during financial crisis, when world leaders agreed to funnel $1.1 trillion into the IMF at a summit in London.
"This can be our 'Washington moment'," Lagarde said last week.
However, the urgency behind the "London moment," as the 2009 meeting was known, has faded as the global economy recovered. Now, many of the richest members of the 187-nation IMF have shifted focus to domestic issues such as paying down debt and stimulating growth.
For its part, the United States has made it clear that the IMF's biggest shareholder will not be contributing any additional funding. The Americans argue that the IMF has sufficient capital, with $400 billion in available resources.
Eurozone nations, by contrast, have already pledged €150 billion in additional loans to the IMF as part of a plan to boost the region's overall "financial firewall."
In addition, non-eurozone nations Denmark, Norway, Poland, Switzerland and Sweden pledged this week to chip in up to $60 billion. Japan also announced plans this week to provide $60 billion in additional IMF loans.
The IMF uses a quota system to determine how much each member country is obligated to contribute. The United States is by far the biggest donor, contributing nearly 18% to the total, followed by Japan with 6.6% and Germany with 6.1%.
"The IMF does not recieve donations," said Lagarde on Thursday. "We receive loans from members of the IMF who become our creditors, and we only draw on those loans if need be."
She stressed that the money the fund lends out is repaid, with interest. "No country has ever lost money on the IMF."
U.S. Treasury Secretary Tim Geithner defended the U.S. position Wednesday, saying European nations have the financial strength to resolve the euro crisis and the IMF should not be considered a substitute.
The U.S. has contributed to the "broader effort" to address Europe's debt problems, Geithner said, pointing to steps by the Federal Reserve to make more dollars available to European banks struggling to fund themselves.
"It's a mistake to look at this and suggest that the United States is holding back from, or standing apart from, this effort," Geithner said at the Brookings Institution in Washington.
Finance officials from the Group of 20 economic powers said earlier this year that eurozone leaders needed to complete their financial firewall before the group would address the issue of IMF funding.
Last month, euro area officials agreed to boost their crisis resources to €700 billion by combining resources from an existing bailout fund with one that goes into effect later this year. The move fell short of the €1 trillion firewall that some analysts say is necessary to ensure that larger euro area economies, such as Italy, are safe from contagion.
"The hope is that these gatherings result in progress in talks to boost the IMF's euro crisis backstop resources," economists at Investec Securities wrote in a report. But a positive outcome is far from assured, "given that the efforts made by euro area authorities to boost their own rescue resources earlier this month risk being taken as half-hearted."
With the world's largest economy ruling out more money, the IMF may turn to emerging economic powerhouses to make up the difference.
China is the most important wild card at this week's meeting, according to analysts at political risk consultancy Eurasia Group. Beijing is expected to contribute about $10 billion to the IMF, which could set the stage for Brazil, Russia and India to make similar commitments, the analysts wrote in a report.
But the so-called BRIC nations will likely use the occasion to push for deeper reforms of the IMF quota system, which would give them a greater role in determining how the fund uses its resources.
"The largest hurdle to an agreement now rests in how to reconcile the desire for the BRICS to tie their increased funding to the IMF to a new round of governance reform," Eurasia analysts said.
Despite this challenge, the IMF is expected to announce $400 billion in additional funding at the end of this week's meeting, according to Eurasia.
|GM raising Corvette prices|
|2 million students missing out on college aid|
|Boeing reports wing cracks on Dreamliners|
|Everything must go: There's a flood of store closings|
|Get ready for 'over-the-top' TV|
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.37%||4.31%|
|15 yr fixed||3.40%||3.32%|
|30 yr refi||4.38%||4.31%|
|15 yr refi||3.39%||3.32%|
Today's featured rates: