The International Monetary Fund announced Wednesday it will launch a new tool to support governments in financial trouble -- but one that involves no money -- formalizing a step it took last week for Greece.
Instead of providing cheap loans to member countries, the new IMF tool will serve as a good housekeeping seal of approval for a government's reform program.
With that approval in hand governments would be more likely to be able to access other forms of financing from banks and bond markets, the IMF said in a statement.
The IMF last week revived a rarely-used mechanism under which it approved a one-year loan to Greece but withheld the disbursement of funds until the country receives significant debt relief from its eurozone partners.
That had a similar effect as the new tool: allowing Greece to return to markets this week to issue three billion euros ($3.5 billion) worth of five-year bonds, and removing a major roadblock in the negotiations with the euro area.
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