Leading world economies yesterday pledged $430 billion in new funding for the International Monetary Fund, more than doubling its lending power in a bid to protect the global economy from the euro-zone debt crisis.

The promised funds from the Group of 20 advanced and emerging economies aim to ensure the IMF can respond decisively should the debt problems that have engulfed three euro zone countries spread and threaten a fragile global recovery.



"This is extremely important, necessary, an expression of collective resolve," IMF Managing Director Christine Lagarde said. "Given the increase that has just taken place, we are north of a trillion dollars actually. So I was a bit mesmerized by the amount."



The $1 trillion figure includes both the IMF's existing and newly won resources, as well as loans already committed.



The IMF would be able to use its increased firepower to help any country or region in need. But Europe's crisis was the driving force behind the push for more funds, though officials and investors alike said it merely buys time for Europe to undertake more economic reforms.



Greece, Ireland and Portugal have already received bailouts. Investors now are worried that Italy and Spain, the euro zone's third and fourth biggest economies, will fail to bring down their debt burdens quickly enough to satisfy financial markets and be forced to follow the same path.



The IMF traditionally has provided aid to struggling emerging market nations, but the euro zone debt crisis has made big industrial economies a new focus. And emerging economies, which have been pressing for a greater say at the IMF, joined in pledging additional funds.



In a central bank statement, China said it "will not be absent from the table" of increasing funds for the IMF, but it did not specify any amount.



Worries about the debt crisis have dominated talks among finance officials in Washington this week for the semi-annual meetings of the IMF and the World Bank, with Spain facing special scrutiny.



The IMF has warned the crisis presents the gravest risk to global economic expansion, though the G20 said in its statement that the threat of a major blowup has started to recede. The IMF estimated in January it would need $600 billion in fresh funds, but Lagarde lowered that figure to $400 billion, saying actions Europe had taken to quell the crisis had cut the risk.



In foreign currency markets, investors welcomed the G20 move, giving a boost to the euro, which has enjoyed its best week since February.



But in a sign investors lack confidence that a big IMF war chest can draw a line under the region's problems, both Spanish and Italian bonds faced pressure on Friday. The yield on Spain's 10-year bond topped 6 percent before retreating..



David Keeble, global head of interest rate strategy at Credit Agricole Corp., said the expansion of the IMF's coffers was only a start in resolving the euro zone crisis.



"The $430 billion is a nice enough size. I'm guessing that they'll get a few billion more, although the market will no doubt come to the conclusion that no number is big enough," he said.



Indeed, IMF officials said the new funds would only buy time for Europe to continue difficult economic reforms. Tensions over whether European countries are sufficiently committed to making deep and painful cuts to their budget deficits or whether European Union policymakers have dug deeply enough into their own pockets have plagued G20 talks over financial resources.



Lagarde defended Europe's actions to date, saying its package of fiscal, financial and monetary measures taken in recent months were "sufficient." However, the head of the IMF's steering committee, the Singapore finance minister Tharman Shanmugaratnam, was more cautious.



"Whether Europe has done enough to build up its firewall depends really on its reforms," he said, speaking alongside Lagarde. "If its reforms lose credibility, if its reforms lose momentum, then quite frankly the firewall is not enough. So it depends entirely on the commitment to reform."



Not all G20 members were committing new funds.



The United States has said it has already done enough by providing dollar liquidity for European banks and Canada has said Europe needs to do more to erect a financial firewall, although it did not close the door completely.



"Circumstances could change," Canadian Finance Minister Jim Flaherty said.



Emerging markets won assurances from their G20 partners that their growing economic clout would be rewarded over time with greater voting power in the IMF, known as quotas - an issue that was central to winning their support.



"We conditioned the money to the completion of the IMF's quota reform so that emerging countries have larger representation - that was accepted," Brazilian Finance Minister Guido Mantega said after the G20 meeting.



While the BRICS group of leading emerging nations - which also includes Russia, India, China and South Africa - have agreed to provide more money, the exact amount each country will chip in was not announced. The issue now goes to the G20 leaders' summit in Los Cabos, Mexico, in June.



The BRICS countries are especially frustrated that the United States is stalling over implementing a 2010 voting reform deal, which would reduce Europe's dominance on the IMF board and give China the No. 3 position. Danish Finance Minister Margrethe Vestage said the European Union would go ahead and give up two IMF board seats later this year as planned.



The G20 communique reaffirmed members would redistribute IMF power by the October meeting, and stick to plans to revisit voting shares next year. This action would recognize that the world economy has changed substantially in view of strong growth in dynamic emerging markets, the communique said, meaning that emerging economies should have greater clout at the IMF.