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Insituform Technologies Inc. improved sales in the fourth quarter, but its profit still fell, the Chesterfield-based company said Thursday evening in a release. The company repairs water, sewer and other underground piping systems.

Insituform reported its income was $9.65 million, or about 34 cents per share, for the quarter ended Dec. 31. That was down about 5 percent from $10.1 million during the same period a year ago, or about 37 cents per share.

The performance was hurt partly by about $1.3 million in costs from reducing the size of its North American and European segments.

The company’s revenues improved 6 percent to $137.3 million during the quarter from $130 million in the quarter a year ago no fax payday loans. The improvement came from the Insituform’s Asia-Pacific segment, which included the first sewer lining instillations done by the company in India.

The company projected an improved performance for 2009, with net income from continued operations of $25.5 million to $27 million, compared to the $24.1 million in had in 2008. Insituform expects a pair of recent acquisitions to create more opportunities to grow revenue.

cboyce@post-dispatch.com | 314-340-8345

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American International Group and U.S. authorities are in advanced discussions over a radical restructuring that would split the insurer into at least three government-controlled divisions in an attempt to keep it afloat, the Financial Times reported on its website, citing people close to the situation.

The insurer’s board is due to meet on Sunday and the company is on track to announce the overhaul as early as Monday, said the report, citing people close to the situation.

The restructuring, described by one insider as a “controlled break-up,” could lead to the end of AIG’s 90-year history as a stand-alone global insurance conglomerate.

It also could provide a template for carving up other troubled financial groups — such as Citigroup — should they be brought under government control, the people involved said, according to the report.

Under the plan, the government would swap its current 80 percent holding in the insurer for large stakes in three units — AIG’s Asian operations, its international life insurance business and the U.S. personal lines business. A fourth unit, made up of AIG’s other businesses and troubled assets, could also be formed, the FT reported payday loans for bad credit.

In return, the authorities would relax the terms, or even cancel a large portion, of a $60 billion, five-year loan to AIG and convert $40 billion worth of preferred stock into shares in an effort to ease the company’s burden, the Financial Times said.

If the plan goes ahead, AIG would remain as a holding company for now. But people involved in the talks say that that company could disappear if the government decides to recoup taxpayers’ investments in the insurer by selling or listing the three divisions separately.

The final shape of the new rescue attempt — the third government bailout of AIG in five months — could still change as talks among company executives, the U.S. Treasury, the Federal Reserve and credit-rating agencies continue, the FT said.

A spokesman for AIG was not immediately available for comment.

(Reporting by Euan Rocha; Editing by Gary Hill)

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Oil prices rose more than $1 Tuesday, tracking a bounce on Wall Street after U.S. Federal Reserve Chairman Ben Bernanke said he was committed to protecting the troubled banking sector.

U.S. crude oil rose $1.52 to end the day at $39.96 a barrel.

The gains came as U.S. stocks jumped more than 2%, bouncing off of 12-year lows hit Monday, after Bernanke told U.S. lawmakers that he was committed to ensuring the economic viability of banks.

Uncertainty about the future of the U.S. banking system has raised concerns the economic crisis could worsen, darkening an already gloomy outlook for U.S. energy demand.

Buying in the oil markets was encouraged by figures showing stronger-than-expected OPEC compliance with its production cuts. Energy consultant Petrologistics said this week that OPEC producers were likely to pump less oil in February than January and a Reuters calculation based on the figures showed the cartel’s compliance to its supply cut agreements was 89% guaranteed high risk personal loans.

"The OPEC compliance was bigger than expected," said Oliver Jakob with Petromatrix.

OPEC members are scheduled to meet March 15 in Vienna and are expected to consider deepening their output cuts.

Oil’s gains Tuesday were limited by U.S. reports showing consumer confidence plunging to a record low in February while U.S. home prices fell at a record pace.

Oil prices have dropped nearly $110 a barrel from their peak in July last year as the economic crisis cuts into global energy demand.

Oil traders are eyeing U.S. oil inventory data Wednesday, which is likely to show a 1-million-barrel increase in crude stocks last week, a preliminary Reuters poll showed. 

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WASHINGTON – Federal regulators said Monday they will launch a revamped program to shore up the nation's troubled banks that includes the option of increasing government ownership in financial institutions.

The new plans are the Obama administration's latest attempt to bolster the strength of the banking system without nationalizing any institutions, which the White House has said it does not intend to do.

The Treasury Department, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, Office of Thrift Supervision and the Federal Reserve jointly issued the statement amid growing concern that some of the country's biggest banks may need additional assistance to survive the fallout from the worst financial crisis since the 1930s.

The new program – a crucial component of President Barack Obama's strategy for handling the $700 billion financial bailout – would give the government greater flexibility in dealing with troubled banks.

In a new twist, regulators have the option of allowing the government to boost its ownership in banks without having to pour more taxpayer money into them. That would be done through a technical change converting the status of the government's shares in a financial institution.

Citigroup Inc. has approached banking regulators about ways the government could help strengthen the bank, including the stock conversion plan, according to people familiar with the discussions. They spoke on condition of anonymity because they are not authorized to speak on behalf of the government or the company.

Still, the regulators suggested keeping banks private is a priority.

"Because our economy functions better when financial institutions are well managed in the private sector, the strong presumption (of the program) is that banks should remain in private hands," the regulators said.

The new federal program, like the old one, will allow the government to continue to inject more taxpayer money, or capital, into a bank, in an effort to ride out the financial storm. Of the first $350 billion in bailout funds, $250 billion was used to provide capital injections to banks, including Citigroup, Bank of America Corp. and others. But the Obama administration has not said how much of the second $350 billion will be used for that purpose.

The regulators on Monday did not name any specific banks or respond to reports that the government was considering increasing its ownership of Citigroup.

The White House just last week downplayed persistent speculation that some banks could be effectively nationalized by the federal government.

"A strong, resilient financial system is necessary to facilitate a broad and sustainable economic recovery," the regulators said. "The U.S. government stands firmly behind the banking system during this period of financial strain to ensure it will be able to perform its key function of providing credit to households and businesses.''

A revamped program, announced by Treasury Secretary Timothy Geithner earlier this month, to plow federal money into banks in return for giving the government ownership stakes will start Wednesday guaranteed fast personal loans.

Regulators provided some details on that program Monday.

"Any government capital will be in the form of mandatory convertible preferred shares, which would be converted into common equity shares only as needed over time to keep banks in a well-capitalized position and can be retired under improved financial conditions before the conversion becomes mandatory," the regulators said.

Such a conversion into common stock would give the federal government more control of a bank – without necessarily having to put up more taxpayers' dollars and could be applied retroactively to banks that already have received billions in capital injections. The banks also benefit because preferred shares pay higher dividends so converting them into common shares will help ease their repayment burden.

Such an option is being considered for Citigroup but also could be available for other banks as well, according to people familiar with the new capital injection program. They spoke on condition of anonymity because they are not authorized to speak for the government.

When asked about reports that the government was considering increasing its ownership of Citigroup, Treasury spokesperson Isaac Baker said the department did not comment on conversations with specific banks.

"We've made clear that we will do what is necessary to strengthen and stabilize the financial system so that it can provide the credit necessary to support economic recovery," Baker said in a statement.

The government is open to considering a request to convert preferred shares purchased as part of its $700 billion rescue program into common stock "if the institution and its regulator believe it would promote the long term stability of that institution and we believe it's in the best interest of long term stability of our economy and financial system," Baker said.

The Wall Street Journal reported late Sunday that Citigroup was in talks with federal officials over the possibility of the government expanding its ownership of the struggling bank to as much as 40 per cent of its common stock. The newspaper said bank executives hope the stake will be closer to 25 per cent.

The new capital injection program will require banks to under go “stress tests" to examine their financial health and determine whether additional capital is needed. Details on how these tests will work may be provided Wednesday, the people familiar with the plan said.

"Currently, the major U.S. banking institutions have capital in excess of the amounts required to be considered well capitalized,'' the regulators said. However, as part of the stress tests, banking examiners will be looking closely at both the quality and quantity of capital.

Later Monday, Geithner will join Obama and other guests at a fiscal responsibility summit at the White House to discuss how to curb a burgeoning federal deficit laden with Social Security, Medicare and Medicaid obligations.

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General Motors of Canada Ltd. says it can no longer afford its pension and medical benefit plans.

The struggling automaker is aiming to renegotiate labour contracts by the end of March as it turns to Ontario and the federal government for money to help it restructure – and thus pay pension and medical benefits earned to date.

GM says it is waiting for actuaries to calculate how many billions of dollars would be required to secure pensions earned so far by 56,000 employees and retirees.

But it warns in a vague outline of its survival plans "the total obligations (or debt) represented by GMCL pensions as they are currently structured are no longer sustainable.

"GMCL is working with the CAW and the governments to explore options to address this challenge."

The company does not spell out how it proposes to secure pensions for retirees while cutting compensation costs for employees. All it says is it is proposing to follow its U.S. parent by transferring money to a union-administered trust fund that would pay for future medical benefits.

Starting in 2007, salaried employees had the formula for earning future pension entitlements cut from an average of their pay in the final years of their careers to an average for their remaining careers.

GM plans to cut its total workforce in Canada to 7,000 by the middle of 2010 online payday loans. The job reductions would leave it with five retirees for each active worker.

"It is becoming increasingly difficult to service GMCL’s legacy cost (or pensioners’ benefits) due to an increasingly large retiree population, high health-care cost, health-care inflation and poor pension asset returns stemming from a recessional market," the company says.

An operating company cannot legally cut pension benefits earned to date. Pensions may only be cut to the extent the pension is short of money when the sponsoring company is forced into bankruptcy. Pensioners then become unsecured creditors.

Ontario has a Pension Benefits Guarantee Fund intended to cover any shortfall for the first $1,000 of a monthly pension. But the insurance plan is now in deficit.

GM Canada notes it had $10.2 billion in pension commitments as of Nov. 30, 2007 and only $8.8 billion in assets. But it would owe more if it were to cease operations. With about 69 per cent invested in stocks, the assets in the plans for hourly and salaried worker would have shrunk dramatically since then.

Last August, former CAW union president Buzz Hargrove told the Star the risk of pension reductions was "so remote a possibility it’s not worth speculating on."

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German Finance Minister Peer Steinbrueck said euro-region countries may be forced to bail out cash-strapped members of the 16-nation bloc, going further than his counterparts in saying euro states can’t be allowed to fail.

“Some countries are slowly getting into difficulties with their payments,” Steinbrueck said late yesterday in a speech in Dusseldorf. “The euro-region treaties don’t foresee any help for insolvent countries, but in reality the other states would have to rescue those running into difficulty.”

Steinbrueck’s comments underscore mounting investor concerns as European nations pile on debt to bail out banks and counter the deepest recession since World War II. The EU governing treaty says member states aren’t liable for other members’ obligations.

While declining to identify countries facing problems, the German finance chief said Ireland, which has a widening budget deficit, is in a “very difficult situation.” The comment came in response to a question from the audience. Ireland’s debt- rating outlook was cut by Moody’s Investors Service Jan. 30.

The European Commission predicts budget shortfalls this year of 11 percent of gross domestic product in Ireland, 3.7 percent in Greece, 6.2 percent in Spain and 3.8 percent in Italy, compared with 2.9 percent in Germany. The EU ceiling is 3 percent.

Euro Weakens

The euro fell below $1.26 for the first time since early December. The difference in yield, or spread, between 10-year Irish and German bonds widened nine basis points to 257 basis points today. It widened by almost six times since the middle of last year as investors demanded higher premiums to hold Irish debt.

The Irish government is committed to restoring sustainability to public finances by 2013, the Dublin-based finance ministry said today in an e-mailed statement. At 41 percent of gross domestic product, the country’s debt is below the EU average of 60 percent, it said.

EU rules don’t “really constrain the ability of euro area countries to support one another during a period of exceptional stress,” David Mackie, chief European economist at JPMorgan Chase & Co. in London, said in a research note. “It’s hard to imagine that the region as a whole wouldn’t come up with a package of measures to support the individual economy payday loans guaranteed no fax.”

Governments including Germany’s may call in help from international organizations first before committing funds and pushing their own budgets deeper into the red to help others.

‘Very Unlikely’

The German government, presiding over Europe’s biggest economy, is “very unlikely” to provide help to troubled euro- region members by selling bonds jointly, Juergen Michels, an economist at Citigroup Inc. in London, said in an interview, adding that it would be a “very expensive solution.”

“The most likely option is that the European Investment Bank or some other multinational organization will start supporting these countries by buying government bonds or by providing direct support,” Michels said. “That would help narrow spreads and reduce refinancing costs.”

Investors should keep buying bonds of European governments that have “more flexibility in funding requirements in the short term,” Barclays Plc analysts said today.

It’s better to be “adding positions here rather than in the periphery, where any renewed funding concerns may weigh more heavily,” Huw Worthington, a fixed-income strategist at Barclays Capital in London, wrote in a research note.

Default ‘Remote’

The chance of Ireland defaulting on its debts is “remote,” Moody’s Investors Service analyst Dietmar Hornung said today in a telephone interview. “Our rating and outlook on Ireland remain appropriate” and “Ireland remains a creditworthy issuer.”

Widening yield spreads are “worrying developments,” Luxembourg Finance Minister Jean-Claude Juncker, who represents the countries sharing the euro at international meetings, said at a Group of Seven gathering in Rome on Feb. 14, according to an unpublished prepared “speaking note.”

Michels said the EU can help governments that are finding it hard to sell their bonds without violating the bloc’s “no bail-out” clause. Any insolvency of a euro region country would be “fraught with significant costs” for the EU as a whole.

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Sen. Judd Gregg withdrew his nomination as President Barack Obama’s commerce secretary Thursday, citing "irresolvable conflicts" over the administration’s stimulus bill and the upcoming 2010 census.

"I realize that to withdraw at this point is really unfair in many ways," the three-term New Hampshire Republican told reporters. "But to go forward and take this position and then find myself sitting there and not being able to do the job the way it should be done on behalf of the president, 100 percent, that would have been an even bigger mistake."

Gregg is the third of Obama’s Cabinet nominees to pull out of consideration - and the second pick for the Commerce Department to withdraw. Speaking during a visit to his home state of Illinois to plug the stimulus bill, Obama said Gregg’s announcement "comes as something of a surprise."

"Mr. Gregg approached us with interest and seemed enthusiastic," he told State Journal-Register in Springfield. "But ultimately, I think, we’re going to just keep on making efforts to build the kind of bipartisan consensus around important issues that I think the American people are looking for."

Gregg said Obama had been "incredibly gracious" during the process, and that it was "my mistake, obviously, to say yes." He added that he would "probably not" seek re-election in 2010.

All but three Republicans in the Senate have opposed the now-$789 billion stimulus bill, which Obama argues is necessary to prevent a more severe economic skid. After being nominated, Gregg said he would not vote on the package, which Obama hopes to sign by Monday.

Asked whether the White House was unhappy with his refusal to support the stimulus bill, Gregg said, "I’m sure that’s true." But he said, "I gave my word to people."

Republicans in Congress also accuse Democrats and the Obama administration of trying to skew the 2010 census, the results of which will be used to apportion legislative seats and distribute federal money.

African-American and Latino leaders raised concerns that the Census Bureau, which is part of the Commerce Department, might lack sufficient resources under Gregg’s leadership to accurately count ethnic minorities. The White House responded by saying it would work closely with the bureau’s next director to ensure "a timely and accurate count" in 2010.

That led Republicans leaders in the House of Representatives to accuse the White House of putting the census under the control of "political operatives."

Gregg told reporters the issue was "only a slight catalyzing issue" in his decision to withdraw.

"It was not a major issue," he said.

But a Republican source close to Gregg says the census "tipped things," adding to increasing concerns that he might be marginalized within the administration instant payday loan.

"Basically if on any issue important to Democratic constituencies they are on one side and Judd is on the other, he is muted," the source said.

And a Democratic source close to the White House said the administration "almost humiliated him" by trying to restrict his influence over the count.

A Republican aide familiar with Gregg’s decision said he had been consulting with GOP leaders privately about this move for the "past couple of days."

White House spokesman Robert Gibbs said in a written statement that the administration regretted Gregg’s "change of heart."

"He was very clear throughout the interviewing process that despite past disagreements about policies, he would support, embrace, and move forward with the president’s agenda," Gibbs said. "Once it became clear after his nomination that Senator Gregg was not going to be supporting some of President Obama’s key economic priorities, it became necessary for Senator Gregg and the Obama administration to part ways."

But Senate Minority Leader Mitch McConnell welcomed Gregg’s withdrawal.

"He is among the smartest, most effective legislators to serve in the Senate - Democrat or Republican - and a key adviser to me and to the Republican Conference. It’s great to have him back," announced McConnell, R-Kentucky.

Gregg would have been the third Republican to join the Democratic administration, following Defense Secretary Robert Gates and Transportation Secretary Ray LaHood.

He is Obama’s third Cabinet nominee to withdraw, following last week’s decision by Health and Human Services Secretary-designate Tom Daschle to quit over tax issues and the withdrawal of Obama’s previous Commerce Department pick, New Mexico Gov. Bill Richardson. Richardson withdrew in early January, citing the distraction of a federal investigation into whether he was played an improper role in directing state business to a company that had donated to his political action committees.

Gregg, a leading fiscal conservative, once voted to abolish the Commerce Department. But a GOP source said Gregg "didn’t want to be a powerless GOP token, and that’s where this was headed."

With Republicans holding only 41 seats in the Senate, Gregg had said he would take the Cabinet post only if his replacement was a fellow Republican. New Hampshire Gov. John Lynch agreed, announcing plans to replace Gregg with the senator’s former chief of staff, Bonnie Newman.

CNN’s Dana Bash, Candy Crowley, Gloria Borger and Jessica Yellin contributed to this report. 

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Don’t have time to wait for a latte or a pot of drip to brew? Starbucks Corp. says it has an answer: Instant coffee.

The Seattle-based coffee retailer (NASDAQ: SBUX) plans to unveil an instant coffee product next week. In a memo sent to Starbucks employees Thursday, Vivek Varma, Starbucks senior vice president of public affairs, said the product could be in stores by Feb. 18.

Varma said this won’t be your father’s instant coffee. She said Starbucks has developed technology to “absolutely replicate the taste of Starbucks coffee in an instant form low cost payday loans.” Starbucks has been working on the project for 20 years, Varma said.

Varma said Starbucks was hosting an event next week in New York and other cities to introduce the new instant product.

Worldwide, there is a $17 billion market for instant coffee, according to the memo.

The new product was reported in Advertising Age, which said Starbucks planned to roll out a soluble coffee product called Via.

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Canadian consumers and businesses are going bust at an alarming rate as the sputtering domestic economy continues to show signs of further trouble ahead.

Bankruptcy filings soared nearly 46.7 per cent in December, the Office of the Superintendent of Bankruptcy said Monday.

The report by the federal monitoring agency found that 8,299 individuals and businesses went bankrupt in December, up from 5,659 for December 2007.

The numbers were a reminder of a troubled economy which appears to be worsening by the day as new layoffs and weaker earnings results continue to pile up.

Laurie Campbell, executive director of Credit Canada, a non-profit credit counselling organization, said she's surprised at how quickly bankruptcies have climbed, even given the current economic sentiment.

"We just heard bits and pieces about recession in October, and suddenly in December the numbers have crept up that high," she said.

Campbell blames more than just the recession, and says Canadians have spent the past few years accumulating more debt than ever.

"Unlike any other recession, the indebtedness of consumers – irregardless of job losses – is so extreme that even if we were not in recession we would still have high (bankruptcy) numbers," she said.

Compound heavy debt with a recessionary climate and she says the result is the dramatic upswing in the number of Canadians throwing in their financial towel.

CIBC economist Benjamin Tal predicts that the results will only worsen this year, pushed higher by the rising unemployment rate.

"You want to see what a recession looks like? This is a recession," he said, referring to the bankruptcy figures and the weak housing start figures also released Monday.

Tal said while the bankruptcy figures are rising fast, he also noted more than 100,000 jobs were lost in January.

"Therefore, this is just the second or third inning of the bankruptcy story," Tal said.

However, he noted that bankruptcies have been falling over the past decade, saying there is a "little room to go before it really gets bad."

The December bankruptcy tally was down 4 no faxing payday loan.3 per cent from the 8,669 who filed for bankruptcy in November, though month-to-month comparisons are generally considered too volatile to reflect an overall shift.

The fourth-quarter total for October to December was higher than in the previous quarter and well above the level of the same period in 2007.

Douglas Hoyes, a bankruptcy trustee with Hoyes, Michalos & Associates Inc., said he's seen a shift in the attitudes of clients who are consulting him for personal bankruptcy advice.

"The people we're seeing everyday are much more worried than they were six months or a year ago," Hoyes said.

"This recession isn't just a theoretical thing anymore. We all know someone who's lost their job, or had their hours cut back, so we all believe `It could happen to me."'

In December 2007, personal bankruptcies amounted to 5,192 while business bankruptcies were 467. In the latest month, individual bankruptcies totalled 7,821, while business bankruptcies totalled 478.

Campbell suggested Canadians need to seriously reconsider their economic situation, even if they are employed and feel financially secure.

"Don't assume that things are going to be absolutely OK, because the truth of the matter is that many people filing for bankruptcy are working," she said.

"We see many people living paycheque to paycheque, meaning that they're one paycheque away from financial disaster."

Campbell said it should be a priority to curb high-interest debts, like credit cards, which can trap consumers in mounting interest payments as they struggle to recover from missed bills.

She said Canadians already worried about unpaid bills should focus on cutting expenses in every aspect of their life and putting the spare money towards their bills. That could even mean simple things like packing a lunch or riding public transit instead of driving.

"People are going to have to make very hard decisions this year, and as unpleasant as it is it'll pay off in the long run," she said.

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Advanced economies are already in a depression and the financial crisis may deepen unless the banking system is fixed, International Monetary Fund Managing Director Dominique Strauss-Kahn said.

“The worst cannot be ruled out,” Strauss-Kahn said in Kuala Lumpur, where he was attending a gathering of central bankers from Southeast Asia. “There’s a lot of downside risk.”

Ten days ago, the IMF cut its world-growth estimate for this year to 0.5 percent, the weakest pace since World War II. Stimulus packages alone won’t succeed in dragging the global economy out of recession unless confidence is restored in the banking system, Strauss-Kahn said today.

“All this will work if, and only if, the different countries are likely to do what they have to do in terms of restructuring the banking sector,” he said. “And today it’s not done.”

The U.S. economy has lost 3.57 million jobs since a recession started in December 2007, its biggest employment slump of any economic contraction in the postwar period as companies from Macy’s Inc. to Caterpillar Inc. cut costs. The U.K. economy will shrink this year by the most since 1946, the IMF forecasts.

“There is hope that the fiscal and monetary stimulus measures being implemented around the world can help turn things around,” said David Cohen, Singapore-based director of Asian economic forecasting at Action Economics. “But there is still the risk it can be short-circuited by further financial turmoil.”

$780 Billion Package

The U.S. Senate is due to vote early next week on an economic stimulus package totaling at least $780 billion that President Barack Obama said is needed to prevent the economy from sinking into a deeper recession. Asian nations from China to Singapore and India have pledged more than $685 billion on their own spending programs.

The Obama administration is considering subjecting banks to a new test to determine whether they require fresh capital injections as part of a rescue plan to be unveiled by Treasury Secretary Timothy Geithner next week, people familiar with the matter said.

Governments should be ready for “full-fledged” intervention, acting quickly to sell or wind-up insolvent lenders, Strauss-Kahn said. While the European Central Bank, which left interest rates unchanged this week, may have more room to cut borrowing costs, such a policy may not be as important as restructuring the region’s banks, he said.

Borrowing Costs

“We’re probably not very far from the point where the question of interest rates is not the most important question,” Strauss-Kahn said cash advance america. “Providing direct liquidity to the market, restructuring the banking sector, may have more influence on demand than interest rates.”

In Asia, “there’s still room for bigger stimulus packages,” the IMF official said. Malaysia, for example, may introduce a second stimulus package larger than November’s 7 billion-ringgit ($1.9 billion) plan, he said.

Developing Asia will probably expand 5.5 percent this year, the slowest pace since 1998, the IMF said in last month’s update of its World Economic Outlook report. The region may expand 6.9 percent next year, the fund forecasts.

Asian nations will need a recovery in the global economy before the region can exit a slowdown, the IMF said this month. Strauss-Kahn said today the fund’s forecast for a recovery to start in 2010 is “very uncertain.”

Demand for Loans

Demand for IMF loans is rising in nations suffering from weaker export sales, banking industry turmoil and deteriorating investor confidence. The organization has so far agreed to lend $47.9 billion to countries affected by the crisis, including Belarus, Hungary, Iceland, Latvia, Pakistan, Ukraine and Serbia.

Strauss-Kahn said he agreed with Poland that the eastern European nation isn’t in need of assistance from the fund now, but may require financial aid in the future.

The fund may collaborate with some countries to restore confidence, without necessarily providing immediate loans, the official said.

“Some need for precautionary arrangements may appear,” he said, without naming specific countries.

Critics of the fund say it’s failed to keep up with the pace of change as the worldwide recession deepens.

The IMF and similar institutions are “incapable” of coping with the global financial crisis, because their resources can’t keep up with demand, former World Bank President Paul Wolfowitz said on Feb. 4.

Russian Prime Minister Vladimir Putin has criticized the World Bank, IMF and World Trade Organization as anachronistic organizations that give no voice to emerging economies.

The IMF and the World Bank were set up at the 1944 Bretton Woods conference. The IMF was designed to prevent crises in the international monetary system and to provide financing to distressed countries.

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