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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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US set to formally recognise Somali government after 20-year hiatus

Category : Business

Secretary of state Hillary Clinton set to announce move as Somali president Hassan Sheikh Mohamud visits Washington

The US will on Thursday officially recognise the Somali government in Mogadishu, ending a hiatus of more than 20 years and opening the door to increased US and international economic help for the country, a senior American official said.

Hillary Clinton, the secretary of state, will announce the move during a meeting with visiting Somali president, Hassan Sheikh Mohamud.

His election last year marked the first vote of its kind since warlords toppled military dictator Mohamed Siad Barre in 1991.

Assistant secretary of state Johnnie Carson said Clinton would “exchange diplomatic notes with Mohamud and recognise the Somali government in Mogadishu for the first time in 20 years”.

The US never formally severed diplomatic ties with Somalia, whose slide into anarchy was highlighted by the 1993 Black Hawk Down incident which saw militia fighters shoot down two US military helicopters over Mogadishu.

In subsequent years, al-Qaida-linked al-Shabaab insurgents seized control of large areas in the south and central parts of the country before Ethiopian, Kenyan and African peacekeeping (Amisom) troops began a long, US-supported counteroffensive aimed at restoring order.

The formation of the new government led by Mohamud is the culmination of a regionally brokered, UN-backed effort to end close to two decades of fighting that has killed tens of thousands.

Carson said the US decision to formally recognise the new government underscored the progress toward political stability that Somalia has made over the past year, including “breaking the back” of the al-Shabaab insurgency.

“We are a long way from where we were on 3 October1993 when Black Hawk Down occurred in Mogadishu,” Carson said.

“Significant progress has been made in stabilising the country, in helping to break up and defeat al-Shabaab. Much more needs to be done, but we think enormous progress has been made and we have been at the very centre of this in our support for Amisom.”

Continued security concerns in Somalia were highlighted over the weekend when French commandos failed to free a French agent held by militants since 2009 during a helicopter raid in southern Somalia.

Clinton does not intend to announce any specific new aid packages for Somalia, which already receives significant humanitarian assistance from the US for drought, famine and refugee relief, one senior US official said.

But formal US recognition of the new government paves the way for new flows of assistance both from US agencies and international actors such as the World Bank and the International Monetary Fund.

The official said the US did not have any immediate plan to reopen an embassy in Mogadishu but indicated that this could also eventually follow Thursday’s announcement. US policy on Somalia is currently handled by a special envoy based in Nairobi, Kenya.

Latin America’s income inequality falling, says World Bank

Category : Business

Region now has as many middle class people as those who are poor thanks to rapid growth in incomes, study reveals

Income inequality is falling in Latin America even as it rises elsewhere in the world, according to a World Bank study that encourages government intervention to reduce the wealth gap.

Over the past 15 years, more than 50 million people have risen into the middle class, which is now – for the first time – about the same size as the population of poor in the region, says the report, which was unveiled on Tuesday.

For decades, Latin America was notorious for some of the widest income gaps in the world, but a combination of favourable economic conditions and interventionist policies by left-leaning governments in Brazil and other countries has brought it more closely in line with international norms.

“This is not just a statistical anomaly. It is a significant reduction in inequality,” said the World Bank’s regional chief economist, Augusto de la Torre.

He said Latin America remains one of the most unequal regions in the world, but it one of the only places where the gap is closing.

“There is some sort of convergence. Latin America is approaching the norm of advanced economies, but unfortunately, advanced economies are approaching the norm of the Latin America model,” De la Torre said during an online press conference to mark the release of the report

He said the main reason for the reduction in inequality is not a compression of income from the rich at the top, but because of a rapid growth in the incomes and spending power of those at the “bottom of the population pyramid”.

About 30% of the region’s population is now in the middle class, which the World Bank defines as those who have less than a 10% chance of falling back into poverty. This is similar to the proportion who are classified as poor. In between is the biggest group, the 38% who are considered “vulnerable” because they live just above the poverty line on an income of between $4 and $10 a day.

The authors of the report emphasised that the gains are still fragile because many people could easily slip back into poverty. Some have increased their spending power through greater access to credit rather than higher-paying jobs. A substantial factor in the economic gains of recent years has been extra demand for commodities from China, which has slowed this year.

“It is a remarkable phenomenon. But we in Latin America must not sing victory yet because it has been accompanied by very strong tail winds in the last few years, very favourable international conditions,” said De la Torre. “If they become much less benign, we must be particularly vigilant to pursue policies that preserve what we have gained.”

The report, titled Economic Mobility and the Rise of the Latin American Middle Class, recommends improvements in public education and healthcare as a way of consolidating the upward mobility of the population. Currently, one of the biggest gaps is not in spending power, but in access to decent social services. In many countries, poorer families have no choice but to put their children in low-standard schools and their sick in poorly-funded hospitals, while the middle class spend substantial sums on private education and health care.

The World Bank’s president, Jim Yong Kim, emphasised the role played by the private sector, which he said creates 90 percent of jobs in developing countries.

But he said the great strength of the story in Latin America was that countries that have self-consciously focussed on reducing inequality have also experienced rapid economic growth.

The recently appointed head of the World Bank – a major lender to developing nations – said he has passed on the same message this week to Haiti, which has the worst inequality in the region and the worst access to education and healthcare in the region.

He described Haiti’s current system as a brand of “market-based capitalism that nobody wanted to see”.

“I made very clear to them that the evidence from the rest of Latin America is that their path to growth has to include many, many more people. It has to open access to the market, to education and to health services to a much broader sector of society. That is not because equality is good and inequality is bad; it is because that is the path to growth,” Kim said.

Land acquired over past decade could have produced food for a billion people

Category : Business

Oxfam calls on World Bank to stop backing foreign investors who acquire land for biofuels that could produce food

International land investors and biofuel producers have taken over land around the world that could feed nearly 1bn people.

Analysis by Oxfam of several thousand land deals completed in the last decade shows that an area eight times the size of the UK has been left idle by speculators or is being used largely to grow biofuels for US or European vehicles.

In a report, published on Thursday, Oxfam says the global land rush is out of control and urges the World Bank to freeze its investments in large-scale land acquisitions to send a strong signal to global investors to stop “land grabs”.

“More than 60% of investments in agricultural land by foreign investors between 2000 and 2010 were in developing countries with serious hunger problems. But two-thirds of those investors plan to export everything they produce on the land. Nearly 60% of the deals have been to grow crops that can be used for biofuels,” says the report.

Very few, if any, of these land investments benefit local people or help to fight hunger, says Oxfam. “Instead, the land is either being left idle, as speculators wait for its value to increase … or it is predominantly used to grow crops for export, often for use as biofuels.”

The bank has tripled its support for land projects to 8bn (£3.7bn-£5bn) a year in the last decade, but no data is available on how much goes to acquisitions, or any links between its lending and conflict.

Since 2008, says Oxfam, 21 formal complaints have been brought by communities affected by World Bank investments, in which they claim that these have violated their land rights.

Oxfam’s chief executive, Barbara Stocking, said: “The rush for land is out of control and some of the world’s poorest people are suffering hunger, violence and greater poverty as a result. The World Bank is in a unique position to help stop land grabs becoming one of the biggest scandals of the century.”

She added: “Investment should be good news for developing countries – not lead to greater poverty, hunger and hardship.”

According to the International Land Coalition, 106m hectares (261m acres) of land in developing countries were acquired by foreign investors between 2000 and 2010, sometimes with disastrous results.

Nearly 30% of Liberia has been handed out in large-scale concessions in the past five years, and up to 63% of all arable land in Cambodia has been passed over to private companies.

Oxfam dismisses the claim made by the World Bank and others that lots of available land is unused and waiting for development. “It is simply a myth. Most agricultural land deals target quality farmland, particularly land that is irrigated and offers good access to markets.

“It is clear that much of this land was already being used for small-scale farming, pastoralism and other types of natural resource use.”

A 2010 study by the Independent Evaluation Group (IEG) – the World Bank’s official monitoring and evaluation body – stated that about 30% of bank projects involved involuntary resettlement. The IEG estimated that at any one time, more than 1 million people are affected by involuntary resettlement in active World Bank-financed projects.

Oxfam urged the UK government, one of the bank’s largest shareholders, to use its influence to persuade it to implement the freeze. “It can also play a crucial role as president of the G8 next year by putting food and hunger at the heart of the agenda, and addressing land grabs as part of this. Critically, it can also press the EU to reverse biofuels targets – a key driver of land grabs.”

Stocking said: “The UK should also show leadership in reversing flawed biofuels targets, which are a main driver for land and are diverting food into fuel.”

In a statement to the Guardian, the International Finance Corporation, the World Bank’s private lending arm, said: “IFC does not finance land acquisitions for speculative purposes. We invest in productive agricultural and forestry enterprises that can be land intensive to help provide the food and fibre the world needs. IFC has roughly a $4.85bn portfolio of agri-related investments. Of that, roughly $600m has a land component. Total land holding related to those investments total 0.7m hectares.

“Competition for scarce land resources has spurred rising investment in land. This competition can fuel conflict with existing users. Inevitably, bank group involvement in forestry and agriculture is not without risk, particularly given the fact we are operating in imperfect governance environments. But the total number of complaints received gives no explanation as to their validity.”

From user fees to universal healthcare – a 30 year journey

Category : Business

Thirty years after he advocated user fees for healthcare in developing countries, former World Bank thinker David de Ferranti, lead author of a Lancet series urging universal healthcare, explains his change of mind

Last week at the UN General Assembly, the Lancet, with the Rockefeller Foundation and Results for Development, officially launched its series on universal health coverage – an idea whose time appears to have come, or perhaps returned. While the political battles are still raging in the USA over access to healthcare and will continue to do so at least until Barack Obama or Mitt Romney is elected, most countries are moving towards some sort of system that allows those who need medical treatment, but cannot afford to pay for it, to get it.

There were some raised eyebrows, however, over the name of the man who led the Lancet series. It was David de Ferranti, now president of the Results for Development Institute but in the 1980s, a staff member of the World Bank and one of the chief proponents of the introduction of user fees.

This is what he wrote in the abstract of his Bank staff working paper entitled “Paying for Health Services in Developing Countries” in 1985, which reviewed “the shortcomings of existing policies, which finance health care to a significant extent from public revenue sources” and looked at alternative options:

The conclusions argue that present policies need to be substantially reoriented in many countries. The conventional and still growing faith that health care should be totally paid for and administered by government needs to be vigorously challenged.

He cautions that extreme care must be taken in developing alternative strategies and adds that a different approach needs to be taken to preventive medicine – such as immunisations. He goes on:

Within this context of reform tailored to service-specific factors, there appears to be considerable scope for having users bear a larger share of health care costs, preferably through a combination of fees for services and fees for coverage, rather than either alone. The most clearcut target for greater cost recovery is non-referral curative care, which together with referral services accounts for over two thirds of health expenditure. Fees for many preventive services should remain below marginal private cost, and in some cases should be zero or even negative (i.e., there should be incentive payments).

Some of the NGOs that have protested over the World Bank’s attitude towards user fees in the past (the Bank has now changed its stance) think the Lancet pieces suggest de Ferranti has undergone a Damascene conversion.

This is from one of them:

For a long time, getting health care has meant first paying a fee to the provider—a practice that effectively burdens sick and needy people, a small and vulnerable segment of the population, with most of the health-care costs. For many poor people, that has meant choosing between going without needed services or facing financial ruin. Paying out of pocket is still dominant worldwide. In India, for example, patient fees account for more than 60% of health expenditure.

Countries moving towards universal health coverage, including India, are seeking to change this situation. By spreading the costs across the whole population, everyone would pay less in times of ill health and those in need of treatment for serious illnesses would be spared from crushingly high costs. Illness would no longer regularly bring financial catastrophe.

I asked de Ferranti about the series and his support for universal health coverage today in the light of his rejection of it in the 1980s. He sees no inconsistency. He says the world has changed in 30 years. The situation then is not the one that pertains now:

If you go back to that time, the actual point that I was making was different than just saying user fees are good. I recognise that other voices in the Bank and other voices talking about the Bank put it that way. But the point I was making was if there is no money to get healthcare to remote areas, to poor areas or to rural areas, then the cry for free healthcare for all means no healthcare for many. And so it wasn’t a sense that user fees are good in their own right but with so few resources available, one needs to look to – that was the argument being made then – those who can pay, so that those who cannot pay would be more able to get services. That’s the argument that was being made.

Since then – I guess it is now 30 years – economic growth rates, higher incomes, all the forces that have led to this florescence of interest and action by countries towards universal healthcare has shown that more resources were available and more that could be applied to health – so that older argument no longer applies. The world has completely changed. Thirty years. Three decades. That’s a long time. Things change and arguments should change. And in the presence of more resources and the ability not just financially but administratively of countries to manage these programmes which was again not there 30 years ago, it just now makes eminent sense and I have been outspoken in this – to move towards universal health coverage systems.

Rick Rowden, author of “The Deadly Ideas of Neoliberalism” and a harsh critic of the user fees policy of the past, says de Ferranti and others who took a similar line were simply part of their era – “riding the political wave of the time – Reagan, Thatcher and the free market”.

“I’m sure he is completely sincere,” said Rowden. “I’m sure he has always meant well.” He does not blame de Ferranti but, he says, the prevailing economic ideas had “tremendous impact on people’s lives over many years”. He speaks of the “reckless” introduction of user fees, which should have been tested out on small groups of people first, and says that later on it should have been clear that they were undermining people’s human right to health.

“I’m more interested in acknowledging the victims of this 30 year economic mistake,” he said. They could have a case for compensation, he says. At Alma Ata in 1978, there was a consensus on the need for universal healthcare, but the movement was derailed by the neoliberal dominance of the 1980s. “From Alma Ata to 2012 is 34 years. That is outrageous. It is amazing to think how many people must have suffered.”

World Bank issues hunger warning after droughts in US and Europe

Category : Business

Damage to crop harvests from exceptionally dry weather this year raises sharply the Bank’s food price index

The World Bank issued a global hunger warning last night after severe droughts in the US and eastern Europe sent food prices to a record high.

Damage to crop harvests from exceptionally dry weather this year raised sharply the Bank’s food price index taking it above its peak in early 2011.

The Washington-based bank blamed the drought in the US for the 25% price rise of maize and 17% price rise in soya beans last month, adding that a dry summer in Russia, the Ukraine and Kazakhstan lay behind the 25% jump in the cost of wheat.

“Food prices rose again sharply threatening the health and well-being of millions of people,” said World Bank group president, Jim Yong Kim. “Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly.”

The bank said food prices overall rose by 10% between June and July to leave them 6% up on a year earlier. “We cannot allow these historic price hikes to turn into a lifetime of perils as families take their children out of school and eat less nutritious food to compensate for the high prices,” said Kim. “Countries must strengthen their targeted programs to ease the pressure on the most vulnerable population, and implement the right policies.”

He added that the Bank was spending $9bn this year supporting agriculture and pledged that help to poor countries affected by food price hikes would continue.

World Bank’s Jim Yong Kim: ‘I want to eradicate poverty’

Category : Business

World Bank president says he will bring sense of urgency to efforts to end global poverty in exclusive Guardian interview

The new president of the World Bank is determined to eradicate global poverty through goals, targets and measuring success in the same way that he masterminded an Aids drugs campaign for poor people nearly a decade ago.

Jim Yong Kim, in an exclusive interview with the Guardian, said he was passionately committed to ending absolute poverty, which threatens survival and makes progress impossible for the 1.3 billion people living on less than $1.25 a day.

“I want to eradicate poverty,” he said. “I think that there’s a tremendous passion for that inside the World Bank.”

Kim, who took over at the World Bank three weeks ago and is not only the first doctor and scientist (he is also an anthropologist) to be president but the first with development experience, will set “a clear, simple goal” in the eradication of absolute poverty. Getting there, however, needs progress on multiple, but integrated, fronts.

“The evidence suggests that you’ve got to do a lot of good, good things in unison, to be able to make that happen,” said Kim. “The private sector has to grow, you have to have social protection mechanisms, you have to have a functioning health and education system. The scientific evidence strongly suggests that it has to be green – you have to do it in a way that is sustainable both for the environment and financially. All the great themes that we’ve been dealing with here have to come together to eradicate poverty from the face of the Earth.”

Kim, who was previously head of the Ivy League Dartmouth College, is probably best known for his stint at the World Health Organisation (WHO), where he challenged the system to move faster in making Aids drugs available to people with HIV in the developing world who were dying in large numbers. In 2003, he set a target of 3 million people being on treatment by 2005 – thereafter known as “3 by 5″. The target was not met on time, but it did focus minds and rapidly speed up the pace of the rollout, which included setting up clinics and training healthcare staff.

Now, he says, he thinks he can do the same for poverty. “What 3 by 5 did that we just didn’t expect was to set a tempo to the response; it created a sense of urgency. There was pace and rhythm in the way we did things. We think we can do something similar for poverty,” he said.

Asked if he would set a date this time, he said he was sorely tempted, but would not yet. “We don’t know what they will be yet, but [there will be] goals, and counting. We need to keep up and say where we are making successes and why, and when are we going to be held to account next for the level of poverty. If we can build that kind of pace and rhythm into the movement, we think we can make a lot more progress,” he said in his office at the Bank in Washington.

Kim was seen by many as a surprise choice for president. During the election, critics argued there should be an economist at the helm. Some said that, as a doctor, he would focus too much on health.

But Kim, who co-founded Partners In Health, which pioneered sustainable, high-quality healthcare for poor people, first in Haiti and later in Africa, said his three years at the WHO have been the only ones of his career that were solely devoted to health.

“It’s always been about poverty, so for me, making the switch to being here at the Bank is really not that much of a stretch. I’ve been doing this all my life and we’re in a bit of the spotlight because of the stuff we did in healthcare but it was really always about poverty,” he said.

Partners in Health offered HIV and tuberculosis treatment to poor people in Haiti for the first time. “We were trying to make a point. And the point we were trying to make was that just because people are poor shouldn’t mean that they shouldn’t have access to high quality healthcare. It was always based in social justice, it was always based in the notion that people had a right to live a dignified life. The good news is that this place – the Bank – is just full of people like that.”

Kim, who has spent his first weeks talking to Bank staff with expertise in a huge range of areas, strongly believes in the integration of all aspects of development, and says the staff do too. He cites a new hospital Partners built in Rwanda, which led to the building of a road to get there and then the expansion of mobile phone networks in the area. “In a very real sense, we’ve always believed that investing in health means investing in the wellbeing and development of that entire community,” he said.

Speaking to the International Aids Conference in Washington this week – the first World Bank president to do so – Kim told activists and scientists that the end of Aids no longer looked as far-fetched as the 3 by 5 plan had appeared in 2003. Science has delivered tools, such as drugs that not only treat but prevent infection.

But the cost of drugs for life for 15 million or more people is not sustainable, he says. Donors are unlikely to foot the bill. Hard-hit developing countries have to be helped to grow so they can pay for the drugs and healthcare systems they need.

Kim would like the highly active HIV community to broaden its focus. “We’ve had Aids exceptionalism for a long time and Aids exceptionalism has been incredibly important. It has been so productive for all of us,” he said. “But I think that as we go beyond the emergency response and think about the long-term sustainable response, conversations such as how do we spur growth in the private sector have to be part of the discussion.”

Every country wants economic growth, he says, and people want jobs. “If I care about poverty, I have to care a lot about investments in the private sector. The private sector creates the vast majority of jobs in the world and social protection only goes so far,” he said.

Nevertheless, he is a big proponent of social protection policies. “I’ve always been engaged in social protection programmes. But now it is really a signature of the World Bank. We’re very good at helping people look at their public expenditures and we say to them things like, fuel subsidies really aren’t very helpful to the poor – what you really need is to remove fuel subsidies and focus on things like conditional cash transfer plans. The Bank is great at that.”

New to him are climate change and sustainability, he says. “We are watching things happen with one degree changes in ocean temperature that we thought wouldn’t happen until there were two or three degree changes in ocean temperature. These are facts. These are things that have actually happened … I think we now have plenty of evidence that should push us into thinking that this is disturbing data and should spur us to think ever more seriously about clean energy and how can we move our focus more towards clean energy.”

But poor countries are saying they need more energy and we must respect that, he says. “It’s hard to say to them we still do it but you can’t … I think our role is to say the science suggests strongly to us that we should help you looking for clean energy solutions.”

Africa needs an active industrial policy to sustain its growth | Ha-Joon Chang

Category : Business

African countries will be better off with a more activist development strategy than with the failed Washington orthodoxy

‘Industrial policy used to be a four-letter word at the World Bank,” observed Joseph Stiglitz, the Nobel economics laureate, in a recent conference on industrial policy in Africa that I attended. He should know. He used be the chief economist of the World Bank, albeit a very unorthodox one.

The statement itself, if a little exaggerated, was nothing extraordinary, as the World Bank’s extreme aversion to industrial policy had been well known. What was extraordinary, however, was where the statement was made – a conference that was partly sponsored by

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Imperialism didn’t end. These days it’s known as international law | George Monbiot

Category : Business

A one-sided justice sees weaker states punished as rich nations and giant corporations project their power across the world

The conviction of Charles Taylor, the former president of Liberia, is said to have sent an unequivocal message to current leaders: that great office confers no immunity. In fact it sent two messages: if you run a small, weak nation, you may be subject to the full force of international law; if you run a powerful nation, you have nothing to fear.

While anyone with an interest in human rights should welcome the verdict, it reminds us that no one has faced legal consequences for launching the illegal war against Iraq. This fits the Nuremberg tribunal’s definition of a “crime of aggression”, which it called “the supreme international crime”. The charges on which, in an impartial system, George Bush, Tony Blair and their associates should have been investigated are far graver than those for which Taylor was found guilty.

The foreign secretary, William Hague, claims that Taylor’s conviction “demonstrates that those who have committed the most serious of crimes can and will be held to account for their actions”. But

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World Bank: High food prices block millennium development goals

Category : Business

Andrew Mitchell, Development secretary said the UK would help more than 60 million people get access to cleaner water over the course of the this parliament

Higher global food prices are hampering attempts to hit targets for food and nutrition, the World Bank said today.

The Bank’s Global Monitoring Report said rates of child and maternal mortality were still “unacceptably high” – partly as a result of surging commodity prices.

Justin Yifu Lin, the Bank’s chief economist, said high and volatile food prices did not bode well for achieving the millennium development goals, targets for reducing poverty that are supposed to be hit by 2015.

“They erode consumer purchasing power and prevent millions of people from escaping poverty and hunger, besides having long-term adverse impacts on health and education,” Lin said.

“Dealing with food price volatility must be a high priority, especially as nutrition has been one of the forgotten MDGs.”

The Bank’s snapshot of progress towards meeting the millennium development goals came as the development secretary Andrew Mitchell announced a doubling of the UK’s effort to provide clean water and sanitation to the world’s poorest countries.

Mitchell said the UK would help more than 60 million people get access to cleaner water over the course of the current parliament.

“Waterborne diseases are a leading cause of death in children under five in Africa and girls are less likely to go to school and receive the education to pull them and their communities out of abject poverty if there are no sanitation facilities,” Mitchell said.

“For too long, water and sanitation has not received the priority it deserves from the international community. But we know that without clean water supplies and proper sanitation, we will never help developing countries stand independently and thrive.”

IMF chief Christine Lagarde in last-ditch struggle to raise funds

Category : Business

Fresh fears emerge that eruption of financial crisis will leave International Monetary Fund short of emergency cash

Christine Lagarde is involved in a struggle to raise funds for the International Monetary Fund amid fears that a fresh eruption of the global financial crisis will leave the organisation short of emergency cash.

The fund’s managing director was lobbying hard for Britain and other developed nations that have yet to pledge money to build a bigger firewall to provide more than $400bn (£250bn) in fresh resources.

George Osborne, who arrived in Washington on Thursday night for the spring meetings of the IMF and the World Bank, has yet to say whether the UK will participate in the fundraising exercise, insisting that the eurozone must show a willingness to sort out its own problems first.

With the US refusing to participate in the fundraising exercise, the IMF has already scaled down its target from the $600bn it was looking for when the eurozone crisis was at its height in late 2011.

But the upward pressure on Italian and Spanish borrowing costs has raised the prospect that the eurozone’s third and fourth-biggest economies might need financial support, providing extra ammunition for Lagarde as she asks for loans both from developed nations and the leading emerging economies.

IMF sources said that they did not expect the US to respond to the call in an election year, since any loan made would have to be passed by both houses of Congress. Lagarde said she wanted the US to play its part in the international effort to combat future crises. “The leading economic power in the world clearly has to have a leadership role,” she said.

Lagarde added that Europe needed to keep up the pace of reform and should aim for a “deepening integration of the eurozone”.

She expressed concern about five “dark clouds” – high unemployment, slow growth, over-rapid deleveraging by banks, strains in the eurozone and higher oil prices – gathering over the global economy. She said she was looking for further support from “our broader membership” to ensure that it could tackle crises and ensure global financial stability.

“The fund needs to participate in building additional firepower to the global firewall we have been advocating. I expect our own firepower to be significantly increased.”

So far, the eurozone has pledged $200bn to the IMF, Japan $60bn and Switzerland $26bn. Four other European countries – Norway, Sweden, Denmark and Poland – have between them agreed to contribute $35bn.

With concern growing about the health of Spain’s banks, Lagarde said she wanted the European authorities to be able to invest directly in financial institutions rather than through governments.

Robert Zoellick, the president of the World Bank, said the impact of the European debt crisis was rippling out to poorer countries in the Balkans, south-east Europe and north Africa. “The eurozone is going to be walking a very fine line,” he said, adding that the European Central Bank (ECB) had only bought time by providing cheap three-year money to eurozone banks. “That time has to be used. There needs to be a focus, not just on austerity and macro-economic stability, but on growth.”

Zoellick said the phase in which banks were able to use the low-cost funds from the ECB to purchase government bonds was coming to an end. “Italy and Spain are vital,” he added. “We are not out of this mess yet. It is still a fragile economy.”

The World Bank president said that the outcome for the eurozone would depend on actions taken in individual countries and the structural reforms they implemented. “It is very difficult to take these steps in a no-growth environment.”

Zoellick, who will be leaving the World Bank in the summer at the end of his five-year term, expressed concern that the new rules for banking regulation drawn up under the Basel III agreement were too tough and would choke off lending. “Basel III is too strict in my view,” he said.