LETTER FROM AMERICA- Rooting for Modernisation

amount required could have been far in excess of SDR 20 billion. Of course, in some years the amount required would be much smaller and, over a sufficiently long period, shortfalls and surpluses would cancel each other out. If compensatory financing is seen as purely an insurance activity, its cost should be zero. Still, as we all know, you cannot run an insurance business without initial funding.