The IMF's "General Arrangements to Borrow" (GAB): A Background Paper

In the wake of the Mexican financial crisis, the G-7 industrial countries (1) agreed, at the Halifax economic summit of June 15-16, 1995, to establish an "emergency financing mechanism." This proposal has ultimately evolved into the so-called "New Arrangements to Borrow" (NAB). (2) The NAB, however, parallels and complements the GAB, which were established in 1962. While the proposed NAB would become the facility of first recourse, the GAB remain in existence and are still available to be drawn upon. More importantly, the SDR 17.0 billion (3) in existing financial commitments to the GAB are counted as part of the total SDR 34.0 billion in financial commitments that comprise the NAB. 1.   The United States, Japan, Germany, France, the United Kingdom, Italy, and Canada. 2.   The NAB are discussed in U.S. Library of Congress. Congressional Research Service. The IMF's Proposed "New Arrangements to Borrow" (NAB): An Overview , CRS Report 97-468(pdf) E, by Patricia A. Wertman. 3.   The Special Drawing Right (SDR) is an international reserve asset that is created by the IMF and used as its unit of account. The dollar value of the SDR fluctuates on a daily basis.