The International Monetary Fund has asked its member countries for an extra $500bn to help fight what it says will be a $1tn global demand for bail-out loans over the next two years.

The estimate, presented by Christine Lagarde, IMF managing director, to the fund’s executive board earlier this week, would most likely be financed by voluntary ad hoc loans rather than requiring all IMF member countries to contribute. The IMF currently has $387bn in immediately available resources.

Following the meeting, of the 24-member executive board, which represents the IMF’s shareholder countries, Ms Lagarde said: “I welcome the recognition of the importance of ensuring adequate Fund firepower to help defuse the current global economic weaknesses and regional challenges.”