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 with an additional $6 billion of their .The additional money was intended to allow the IMF to
have increased lending resources.

In 1964, the funds were used by the IMF to rescue the pound sterling] The G-10 grew in 1964 by the
association of the eleventh member, Switzerland, then not a member of the IMF, but the name of the
group remained the same.

G10 Functions and Critiques

The Finance ministers and central bank governors from each of those countries gather in connection
with annual meetings of the International Monetary Fund and the World Bank to discuss financial and
monetary policies that impact member countries, trade, and the global economy.

According to the IMF, the GAB is only activated when NAB participants reject a proposal to activate the
New Arrangements to Borrow (NAB) agreement (a credit arrangement between the IMF and its 38
member countries allowing for the borrowing of supplemental resources).

Also, according to the IMF, the potential amount of credit available under the GAB totals 17.5 billion
SDR, with an additional 1.5 billion SDR available under an arrangement with Saudi Arabia.

G10 governors usually meet every second month at the Bank for International Settlements (BIS). The BIS
is an international finance organization owned and operated by 60 member central banks that together
comprise over 95% of the world's GDP. Its mission, according to its website, is to serve central banks in
their pursuit of monetary and financial stability, foster cooperation among the banks, and serve as the
central bank for them,

The BIS, European Commission, IMF and Organization for Economic Cooperation and Development
(OECD), are all official observers.

The G10 has been criticized for its lack of responsiveness to the needs of developing countries. G10
meetings are politically charged events that often make headlines in the international press
of mobile devices.

Related Terms

Smithsonian Agreement

The Smithsonian Agreement was a deal reached in 1971 among the G10 countries to adjust the system
of fixed international currency exchange rates. more

General Agreements to Borrow (GAB) Definition

General Agreements to Borrow (GAB) was a lending medium offered through the International
Monetary Fund (IMF) by the Group of Ten (G-10) countries.